Vietnam may adjust VND/USD FX rate during Tet

On January 27, the VND/USD exchange rate on the free market in Hanoi traded at 20,930 – 21.000 dong/US dollar (bid and ask), according to Lao Dong newspaper.

Compared with the exchange rate that was quoted on the banking system at 19.500 dong/US dollar, the exchange rate on the free market is now higher than 10.7 percent.

Statistically, the difference of 7-10 percent has been maintained for almost three months. Many opinions are very supportive about the exchange rate adjustment in this Lunar New Year. The market is waiting this news when only a few more days are left for the Lunar New Year.

According to experts, the difference in the exchange rates has made it difficult for banks doing foreign currency business.

It is worth mentioning that this bring more difficulties for export-import companies that have to accept the free foreign currency exchange rate.

According to Thang Long Securities Corporation (TSC), the market, including commercial banks had in one way or the other accepted almost trading at the exchange rate of the free market.

But the recent messages from the government are likely to make an adjustment in the exchange rate during the Tet festival this year.

Professor Tran Hoang Ngan, member of Vietnam’s National Financial and Currency Advisory Council has proposed to the government to adjust the exchange rate right in January when the short-term funds into Vietnam tend to rise, the US dollar price tends to decrease on the free market along with information sources remittances of up to $8 billion.

Besides, the information refers to the exchange rate that may be adjusted at 20.500 dong/US dollar and suggested that dong interest rates should be as high as reasonable to encourage people not to withdraw dong to buy the foreign currency.

According to Pham The Anh, chief economist of TSC, the message shows the exchange rate adjustment will soon be implemented, and now the only problem is choosing the most appropriate time. – Laodong

Tags: exchange rates