Central bank vows to clean up the free foreign currency market

A series of illegal foreign exchange points have been punished and large sums of foreign currencies have been seized as part of a cleanup of the black foreign currency market.

The State Bank of Vietnam has been urged to take more drastic measures to settle the situation which is considered one of the reasons behind recent problematic currency issues.

As a result, black market foreign currency dealers have hurried to scale down operations after the State Bank of Vietnam announced measures to stabilize the foreign currency market.

The dollar price, which once hit the 20,000 dong per dollar level, has decreased to 19,260-19,280 dong per dollar.

A Nguoi Lao Dong reporter, who visited a gold shop at Tan Dinh Market in HCM City on January 14 and asked to purchase $50,000, was refused by the shop owner.

The owner said that he had only several thousand dollars to sell. “We dare not take on too much money for fear of the risks. Government agencies are taking regular inspections and imposing fine,” he explained.

According to Le Van Dong, a foreign currency investor in Hanoi, many foreign currency traders on Ha Trung Street, which is called the foreign exchange street, have been punished.

“Foreign currency speculators now refuse to purchase dollars in large quantities following information that M.H gold shop on Nguyen Dinh Chieu Street in HCM City had millions of dollars seized and had to pay 55 million dong in fines recently,” Dong said.

According to the director of a gold shop at Go Vap District in HCM City, speculators now cannot control the market as they did many months ago. However, he said that as dollar prices on the free market are still higher by 800 dong per dollar than the rate quoted by commercial banks, people still prefer making transactions on the free market.

According to Nguyen Hoang Minh, deputy director of the HCM City Branch of the State Bank of Vietnam, it is now still difficult to purchase foreign currencies from banks, because banks are focusing on selling dollars to satisfy the demand to import essential goods.

Minh stressed that people, who purchase and sell dollars at foreign currency exchange points which do not have licenses, are violating laws. These people will have their dollars seized, and be fined up to 57.5 million dong.

According to Vo Van Chau, advisor to the management board of the Dai Tin Bank, under current regulations, licensed foreign currency exchange points must show licenses. The points are mostly located at hotels, railways and airline booking agents as well as border gates, seaports and economic organizations headquartered in the central area, and areas where there are many foreign tourists.

Dr Cao Sy Kiem, member of the National Advisory for Monetary Policies, said it is now the right time for the State Bank to clean up the market. “If it does not do this now, it never will,” he said, adding that illegal foreign currency exchange points had caused chaos on the market.

Vu Dinh Anh, deputy head of Market and Price, while sharing the same view with Kiem that it is necessary to clear away illegal foreign exchange points, said that SBV needs to create better methods for people to access foreign currency sources. If demand can be satisfied by the official finance system, they will not take the risks to make transactions on the black market.

VietNamNet/NLD

Tags: Vietnam finance news, Vietnam foreign currency market