Vietnam central bank quotes dollar at vnd20,628, unchanged from monday

Vietnam’s central bank set the U.S. dollar’s exchange rate at VND20,628 Tuesday, unchanged from Monday.

Hanoi-based currency dealers said the gold-shop rates are continuing to rise because demand for dollars strengthened after the central bank issued a statement late Monday saying it would allow companies to import more gold to meet local demand.

The central bank didn’t give details on the volume and timetable for the gold import plan.

“The central bank has to allow gold imports because many companies have sold large volumes of gold recently,” said a dealer with Hanoi-based Vietnam Gold Traders Association. The dealer said local buyers reportedly bought up to 20 metric tons of gold in recent days after global prices fell below $1,650 a troy ounce, causing a shortage of supply in the domestic market.

The dollar rates are also rising because many currency investors are buying into the greenback after all the banks in Vietnam earlier this month cut interest rates for dong deposits to 14% from above 18%.

“State-run Vietnam Television reported that people have taken tens of trillion of dong out of the banks recently, and I guess many people are seeking to buy dollars as a way to protect their wealth,” said a trader with a gold shop in Ha Trung Street, which is known as Hanoi’s Wall Street.

The trader added that although some gold shops are quoting the U.S. unit in a range of VND21,240-VND21,300, buyers can expect to pay at least VND21,500 if they want to buy large quantities of dollars.

Source Dow Jones

Tags: Vietnam banking industry, Vietnam finance, Vietnam financial, Vietnam forex market