Concerns rise over dual dollar pricing at banks

The U.S. dollar on the free market has jumped to fresh highs of around VND21,000, sparking concerns among enterprises over the return of the dual dollar pricing at banks.

The chairman of a large steel company said that his company had to buy the greenback from banks at a price higher than the formally quoted rate. Fees and other expenses included, the company had to buy dollars at over VND21,000 while the highest quoted price at banks allowed by the central bank was just some VND20,834 these days.

“The U.S. dollar price changes from day to day depending on supply. The difference between the actual selling price at banks and the quoted price may swell to VND100 if the supply is not ample,” he continued.

He added that when dealing with banks, he noticed that state-owned banks and joint stock ones alike sold the greenback at a price higher than the quoted one though the price at state-owned banks was a little lower.

Thus, the resurfacing dual dollar pricing scheme is threatening enterprises as it was in previous years, making it difficult for both importers and exporters to keep their accounting books due to the unofficial fee.

Despite assertions from the State Bank of Vietnam to stabilize the exchange rate in the rest of the year, bankers advised enterprises to be discreet when making dollar transactions.

Trust Bank chairman Hoang Van Toan said that despite the central bank’s commitment to timely intervene in the forex market, “it does not mean that the risk is not out there.” Therefore, enterprises should prepare themselves right now for the situation rather than believing that the exchange rate would absolutely be stable, he said.

There are few enterprises resorting to risk-hedging tools provided by banks to avoid forex risks as they do not want to suffer from additional costs, Toan said.

Do Thi Minh Hanh, head of the Treasury Department of Military Bank (MB), ascribed the modest number of enterprises using the tools to the lack of information and understanding about its benefits, saying that some vehicles such as forward transaction and currency swap cost no fees.

Her bank now provides a forward currency product which helps enterprises avoid forex risks. The tool is increasingly accepted by enterprises, but the absolute number is still inconsiderable, she said.

Source Saigon Times

Tags: Vietnam banking industry, Vietnam finance, Vietnam financial