Chuck Kuhn's Asia in Photos: Vietnam Money-Dong falls as hefty imports boost dlr demand

Monday, May 12, 2008

Vietnam Money-Dong falls as hefty imports boost dlr demand

The Vietnamese dong fell to a seven-month low against the U.S. dollar on Monday due to increased demand for the foreign currency from importers because of a widening trade deficit, bankers said.
The dollar hit 16,125 dong on Monday, the highest since October 4, 2007 when it stood at 16,126 dong. The central bank also allowed the dollar to rise to 15,995 dong in its official exchange rate, the highest for nearly two months.
"There has been a shortage of U.S. dollars in banks recently," Ho Huu Hanh, head of the State Bank of Vietnam's branch in Ho Chi Minh City told Thanh Nien newspaper over the weekend.
The Finance Ministry-run Vietnam Financial Times newspaper said on Monday that the central bank has sold more than $800 million to banks in the past month to meet demand from customers, mainly for imports of fuel, steel, cars and electronic parts.
Vietnam's trade deficit in the first four months of 2008 jumped nearly four times from a year earlier to $11.1 billion as January-April imports surged 71 percent to $29.36 billion, government figures show.
Commercial banks have started various promotions to attract dollar deposits.
The Military Bank said on Monday it has started selling short-term dollar bills to raise $20 million over two months and the Ho Chi Minh City-based Eximbank announced prizes to attract savings in dollar, gold and the Vietnamese dong.
Dong funds have also been tightening. Major banks offered overnight dong loans at 9 percent to 11 percent on Monday, up from 5-10 percent in late April VNIBOR.
Rates on six-month dong loans also rose to between 10 percent and 14 percent on Monday, from 10-13 percent on April 28.
The Vietnam Financial Times newspaper report said the central bank planned to absorb 10 trillion dong from the market in near future as a measure to control inflation, a move that further tighten dong liquidity. (Reporting by Ho Binh Minh; Editing by Tomasz Janowski)
© Thomson Reuters 2008 All rights reserved

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They say "

“I can’t say what made me fall in love with Vietnam - that a woman’s voice can drug you; that everything is so intense. The colors, the taste, even the rain. Nothing like the filthy rain in London. They say whatever you’re looking for, you will find here. They say you come to Vietnam and you understand a lot in a few minutes, but the rest has got to be lived. The smell: that’s the first thing that hits you, promising everything in exchange for your soul. And the heat. Your shirt is straightaway a rag. You can hardly remember your name, or what you came to escape from. But at night, there’s a breeze. The river is beautiful. You could be forgiven for thinking there was no war; that the gunshots were fireworks; that only pleasure matters. A pipe of opium, or the touch of a girl who might tell you she loves you. And then, something happens, as you knew it would. And nothing can ever be the same again.”
― Graham Greene, The Quiet American

Tips on Travel to Vietnam

It's always warm in Southeast Asia apart from high mountains, so leave the heavy clothing at home. Cotton and breathable fabrics are always better than synthetics -- although cotton does wrinkle a lot when traveling! December through April is roughly the dry season in that region, although it can still rain a little. December is a good time to go in terms of temperature -- cooler than in the humid summertime. Either way, wearing more clothing (shirt sleeves and long pants) is always more respectful towards the Asian culture, especially when visiting temples and rural areas.