Vietnam dollar market cools down after rumor-driven rally

10.12.2016

Vietnam’s dollar market has started to cool down following a rumor-fueled rally earlier this week, with banks quoting the greenback well below the ceiling.

On Friday, banks continued to lower dollar price by VND60 a dollar from the day before.

Eximbank started yesterday with a quote of VND22,670 a dollar, but closed at VND22,610 a dollar. Vietcombank quoted the greenback at VND22,610 a dollar at the closing session, and ACB, VND22,620.

By the end of Friday, dollar price was VND190 lower than the peak of VND22,800. Bid prices for the greenback at banks also ranged from VND22,520 to VND22,530 a dollar.

The greenback reached VND23,000 on the Vietnamese unofficial market earlier this month, following false rumor that a new currency would be issued to replace the current one.

The State Bank of Vietnam and the government have repeatedly confirmed that the rumor is unfounded, with efforts underway to trace the rumor maker.

The continuous denials appear to be effective, with dollar price dropping yesterday even when the central bank increased the mid-point rate by 2 dong, setting at VND22,117 a dollar.

With the dollar/dong trading band set at +/- 3 percent of the mid-point rate, the new ceiling price for the dollar is VND22,780 a greenback.

This means banks are quoting prices as much as VND170 a dollar lower than the new ceiling.

In the meantime, the Vietnamese gold market, which has also been affected by the currency replacement rumor, still went against global trend on Friday.

On the global market, gold closed yesterday at $1,163.3 an ounce on Wednesday, or VND31.71 million (US$1,416) a tael (37.5 grams), while domestic price only lost VND180,000 ($8) a tael to VND36.3 million ($1,621) a tael.

The gap between Vietnamese and global gold prices was VND4.59 million ($205) a tael, a difference experts say is so unreasonably high that consumers must think twice before any decision to sell or buy.

Source: Tuoi Tre News

Photo: SBV