SBV tightens control over black market, dollar price up

HCM City’s black market has become more busy than ever, as now is the kieu hoi (overseas remittance) and travel season.

The year’s end is always time for overseas Vietnamese to remit money to their relatives so that they can enjoy Tet.

Those who receive kieu hoi sell dollars for dong to make purchases for Tet.  Now is also the travel season and those who plan to travel abroad also purchase dollars to spend. When both the demand and supply increase, the market becomes more hectic.

Now, despite rigid control by the State Bank of Vietnam (SBV), the black market is thriving well.

SBV HCM City Branch Director Ho Huu Hanh told VnExpress that gold shops are not allowed to exchange foreign currencies, and that any transactions will be heavily punished. Unlicensed gold shops that sell dollars and individuals who make these transactions will have their dollars seized.

Hanh stressed that people can only sell foreign currencies to banks or bank branches, or exchange centres licensed by SBV. “We will take drastic measures to put the free market in order,” he asserted.

SBV will join forces with other agencies, including the police and market control taskforce, to conduct unannounced inspections.

Still, the free market in HCM City remains busy. Some people stated that they prefer selling dollars to gold shops, because commercial banks pay much lower.

Even those with legitimate need to purchase dollars for trips abroad for healthcare or study, turn to the black market because they have been refused by banks.

Thanh Nhan, 45, told VnExpress that he wants to purchase $1,000 to prepare for his family’s trip to Singapore at Tet. Banks told him to wait and none have promised to sell dollars to him.

“I finally decided to go to the gold shop on Tran Hung Dao Street in District 5 to purchase the dollars I need,” he revealed.

“The shop owner said he could provide as much as I demanded. However, I had to pay a high price for the dollars, 19,600 dong per dollar,” he recalled.

VnExpress reported that the sale and purchase of dollars are still being carried out in the open air.

A gold shop owner explained that the purchase price was 19,300 dong per dollar on January 28 morning, while the sale price was 19,600.

“They (Government agencies) are conducting harsh inspection tours. Therefore, every dollar has become 100 dong more expensive,” he observed.

Several thousands of dollars are traded every day by each shop.

When asked why the black market is still bustling despite strict controls, gold shops’ owners said that whenever there is demand, suppliers are ready.

“I know that many people, who travel or go on business abroad, cannot purchase dollar from banks and they have no other choice,” he added.

One gold shop has employed security guards to alert them if inspectors arrive. With the guards on duty, purchasers and sellers can freely make transactions inside.

Hanh also admitted that banks’ foreign currency reserves are limited and that they can only meet the demand of a limited number of people.

VietNamNet/VNE

Tags: Vietnam currency market, vietnam dollar price, Vietnam finance news