Chuck Kuhn's Asia in Photos: SBV threatens black market

Tuesday, December 8, 2009

SBV threatens black market | Look At Vietnam

VietNamNet Bridge – SBV has announced that it will take “drastic measures” put a halt to illegal foreign currency trading, which affects the foreign currency market.

In an interview with Lao Dong newspaper, Director of the Foreign Exchange Management Department under SBV, Nguyen Quang Huy, maintained that while the trading volume on the black market is very small, it has a significant impact.

“SBV, once again, affirms that it is illegal to trade US dollars on the black market and it will apply drastic measures to stop the illegal trading,” Huy stated.

Huy admitted that the dong/dollar rate on the black market remains relatively high.

When asked about the current foreign currency market situation after SBV applied a series of stabilization measures, Huy affirmed that the market’s supply and demand has been balanced and liquidity improved.

Many enterprises have been selling foreign currencies to banks and exchange rates in transactions among commercial banks and between banks and businesses are not exceeding the ceiling levels.

Huy believes that making VND deposits is the best solution for now. The average VND interest rate is some 10 percent, while the inflation rate forecast for 2010 is below seven percent, which means that it will be more profitable to keep dong than dollars.

Saigon Tiep Thi newspaper reported on December 4 that many businesses still could not purchase dollars late last week.

Maritime Bank sold some 50 million dollars to big economic groups late last week. The bank is an “unasked-for” bank – not one of the eight banks that committed to selling dollars to businesses at the “official” exchange rate.

A Saigon Tiep Thi reporter called Eximbank on December 3 to ask if he could purchase dollars for a business trip abroad

He was told that the bank only sold dollars (at 18,486 dong per dollar) to students traveling to study abroad. The bank confirmed that it did not sell dollars to business travelers.

The newspaper also reported that the bank promised a group of travelers to sell dollars at 19,100 dong per dollar on the same day.

A bank officer stated that not many exporters are selling dollars at the moment, preferring to keep a wait-and-see attitude.

The Ministry of Industry and Trade is applying comprehensive measures to boost exports and reduce trade deficits and the Ministry of Finance has raised the import tariff on luxury items to earn more and also reduce the spending of foreign currencies.

Regarding gold investments, Huy cautioned that gold is a very risky investment and advised investors to be wary. The domestic price of gold has come in line with international prices, but international prices have proven to be unpredictable.

When asked when the foreign currency market will return to normal, Huy replied that this will occur “soon.”

VietNamNet/LD, SGTT

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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.