Importers gouge buyers after dong depreciation

Sellers of imported items are up to their usual tricks following the recent devaluation of the dong by the central bank – they are demanding that customers pay at the new dollar exchange rate.

This despite the fact that the law stipulates that only the local currency can be used for transactions, the goods may have been imported at the old rate, and most shops have price tags in dong.

The State Bank of Vietnam depreciated the dong by 3.3 percent on February 11, fixing the interbank rate at VND18,544 against 17,941 a day earlier.

When a Tuoi Tre correspondent posed as a buyer Tuesday at a car dealer’s on Chanh Hung Street in Ho Chi Minh City’s District 8, he was told he can either pay in dollars or at the exchange rate of VND19,500 a dollar. The SBV’s official rate that day was VND18,544 to the dollar.

The salesperson claimed that had been the rate at the time of import.

But most of the cars on display at importers’ showrooms were bought at the beginning of the last quarter when the official and market rates had respectively been VND17,850 and above VND18,000 to the dollar.

The highest rate during the entire quarter had been VND19,500.

Tour operator Vong Tron Viet (Viet Circle) Travel and Service Co. demanded payment at VND19,498 and VND19,315 for tours to Singapore-Malaysia and Malaysia, explaining they were based on the fees the company has to pay foreign partners in case of cancelation.

To evade the law, shops selling computer and electronic components on Bui Thi Xuan and Ton That Tung streets disguise the market forex rates they have on tags and charts as codes for their items.

A D-link wireless adapter costing VND573,000 at a shop on Cach Mang Thang Tam Street was coded N29.6. It is the number by which to divide the price to get the day’s exchange rate of VND19,358, revealed the director of another shop in the area.

Other shops indicate only “reference” prices which often means buyers have to pay more when buying depending on the day’s forex rates on the street.

A Phu Nhuan District resident had to pay VND281,000 for a computer mouse which had a reference price of VND257,000.

Since payments for imports, mostly done before Tet, were at fixed exchange rates, the price hikes have nothing to do with rising rates as claimed, a sales manager of an electronics showroom, who asked not to be named, said.

An SBV official, who asked not to be named, admitted it would take longer to stop businesses from pricing their product in the greenback, adding it required severe penalties and narrowing the gap between the official and unofficial exchange rates.

Tags: Vietnam importers, Vietnam imports

Posted by VBN on Mar 12 2010. Filed under Import-Export. You can follow any responses to this entry through the RSS 2.0. You can leave a response or trackback to this entry