Banks Likely to Be Allowed to Trade Dollars at Negotiated Prices

The State Bank of Vietnam (SBV) may allow local credit institutions to buy and sell foreign currency cash at negotiated prices, but in a certain limit.

 

The Foreign Currency Department has sent a dispatch to commercial, saying that they can trade foreign currencies at negotiated prices after they get permission the SBV.

 

Banks have earlier called for central bank to allow them to buy and sell dollars under negotiation methods with trading band wider than that regulated by central bank.

 

Many banks said they have faced difficulties in trading dollars due to narrow trading band, though central bank raised it from 0.75 per cent to 1 per cent. They have had to buy dollars at the exchange rates regulated by central bank, but they collect a small free because the rates are still higher than the market rates.

 

At present, only Vietnam Export and Import Bank (Eximbank) is allowed to buy dollars of individuals at negotiated prices.

 

A preliminary statistics show that foreign investment and overseas remittances sent to Vietnam in the first two months reached US$3.5 billion, including US$1.5 billion remittances.

 

In addition, commercial bank withdrew deposits overseas and foreign investors changed money into Vietnam dong, making strong supply of foreign currencies, leading to appreciation of Vietnam dong. (VietNamNet, VNA)