Dollar sales ease shortage

PetroVietnam has complied with a Government order and sold US dollar reserves to commercial banks, helping increase US dollar liquidity in the banking system. — VNA/VNS Photo Thanh Long.

HA NOI — The US dollar liquidity of the banking system has improved remarkably since beginning of January, as major State-owned enterprises have complied with a Government order and sold about US$450 million to commercial banks, according to State Bank of Viet Nam deputy governor Nguyen Dong Tien.

Most of the dollars were placed on non-term deposit by seven State-owned economic groups and corporations, including oil and gas giant PetroVietnam, mining giant Vinacomin, the Viet Nam National Chemical Corporation (Vinachem), Vietnam Airlines, the Viet Nam Machine Installation Corporation (Lilama), and two major food processors, the Viet Nam Northern Food Corporation and the Viet Nam Southern Food Corporation.

"The US dollar sales have supported the forex market very much. Banks have more room to breath," said Habubank deputy director Nguyen Du Huong. "The foreign exchange system has stabilised thanks to the Government's move, although I don't know how long the support will last."

At the end of last November, dollar deposits of these seven enterprises totalled $1.9 billion, of which $700 million was in non-term deposits and $1.2 billion was in term deposits.

The interbank exchange rate of VND17,941 per US dollar has been stable for over a month, a situation rarely seen in recent years. Banks were selling dollars at a quoted rate of VND18,479,allowing them to retain a profit margin on forex activities. During the peak of the greenback shortage, banks had been forced to list the same price for both buys and sells prices.

A dollar was recently traded on the black market at VND18,900-19,100, compared to VND19,400-19,600 at the end of last year.

Tien, meanwhile, said that the Government would get tougher on illegal currency traders.

"At this time, we do not condone a two-exchange rate policy," said Tien. "The exchange rate is set by the central bank and credit institutions must trade in accordance with these regulations. We have various measures to make people comply with the foreign exchange regulation, focusing on trading the dollar at unauthorised forex agents, unlawful posting of prices in dollars, and trading goods in dollars."

The State Bank was working with municipal People's committees, media outlets and public security offices to promote and inspect for compliance. — VNS