Vietnam & World Forex Market News

The US dollar has stayed down in the official market for the last two weeks but rose on the street to VND17,900.

On gold trading exchanges across Ha Noi, the precious metal was VND19.39-19.47mil a tael. Gold shops on Tran Nhan Tong Street reported slow trade yesterday.

Commercial banks lowered the rate from VND17,829 to VND17,787 yesterday.

An abundant supply of short-term US dollar from trade surplus, coupled with slow disbursement of US loans, is blamed for the depreciation of the dollar.

The General Statistics Office reported Viet Nam had a record US$1.7 billion trade surplus for the first three months of this year.

Subsidised loans

At the same time, enterprises have been focusing on subsidised dong loans rattier than US dollar loans, and the growth of dong loans increased following the launch by the Government late last week of a new subsidy programme [available till the end of 2011] for new business projects and infrastructure developments.

The ongoing sluggish global trade activity is believed to have affected foreign trade across Viet Nam's border, which caused a decrease in dollar demand and abundant dollar supply at commercial banks, indicated by the dollar interest rate decreasing by 0.1-0.2 per cent per year for short-term deposits to 2.05-2.54 per cent annually.

But while the dollar is cheaper at the banks, it has steadily climbed on the street from VND17,860-17,900, up VND250-300 per dollar.

Thanh Van, a shopkeeper on Tran Nhan Tong Street, said that late last week customers came to her shop to buy dollars, pushing the greenback up, but they were back yesterday to sell.

Ha Noi-based securities broker Tran Phuc said VND17,900 per dollar was profitable for him.

"So I sold. I also want to transfer the dollar to the dong to buy stock. The stock market has signalled recovery and the current prices are affordable to me."

Experienced dollar and gold investor Do Dang Tan said many investors probably hoped gold prices would fall this week.

"So they transfered the dollar to the dong to buy gold whenever gold falls."

Meanwhile, domestic gold yesterday reduced by VND400,000-500,000 per tael (a tael equals 1.2 troy oz) against late last week to VND19.39-19.45 million ($1,090-1,093) for the third consecutive session, following a bullion fall on Monday on global market as some investors unwound safe-haven positions while others sold as the dollar strengthened and some investors were also unloading gold along with other commodities.

Gold slows

Bao Tin Minh Chau Jewellery Co traded gold at VND19.42-19.49 million ($1,091-1,095) a tael and the Sai Gon Jewellery Holding Co traded gold for VND19.39-19.45 million ($1,090-1,093) a tael from VND19.84-19.92 million ($1,120-1,125) last week.

On gold trading exchanges across Ha Noi, the precious metal was VND19.39-19.47 million ($1,090-1,094) a tael.

Gold shops on Tran Nhan Tong Street reported slow trade yesterday.

"Investors are becoming smarter. They are likely to 'listen to the market's move'. The current domestic gold price is VND300,000 ($16.86) per tael higher than global price, so they don't want to buy or sell at this time," Bao Tin Minh Chau business manager Nguyen Huu Dang said.

"I think domestic price will dip more before rebounding," he said.

The domestic gold price was up by about 4.3 per cent for the first quarter of this year against the first three months of last year.

Global gold prices yesterday rose in a technical rebound and a round of short-covering after dropping 6 per cent over three days, climbing 1 per cent to as high as $877.60 per ounce, up nearly 0.9 per cent from New York's notional close of $868.80.