Under Decree No. 11 of the government, State bank of Viet Nam sent out warning messages against foreign exchange including measures to limit foreign currency loans and mobilization, subjects of USD loans, and foreign currency exchanges in a bid of controlling inflation, stabilizing macro-economics, and social wellfare.
Interest rates of USD deposits is cooling down thanks to measures of State bank of Viet Nam.
Investigation of trading centers across Thu Dau Mot and Thuan An Towns showed that USD is favored in almost every product. Some shops even list prices both in USD and VND. Meanwhile, telecommunication services also charge in USD throughout their networks. And it becomes worse when trading without a single element of foreign exchanges is paid in USD. In responding to such circumstances, Petrolimex Bank Director Le Vu Thuy explains that easy price sliding of VND has prompted people to use USD instead; however, others who favor ‘foreign elements’ choose USD for their payments and bank foreign exchange sites become foreign currency trading. And thus, in his explanation, the recent scarcity of USD was caused by preservation of majority of people and organizations not by imbalance of the banking systems. This is claimed to be a great effect on economy.
Statistics in the first two months of the year by State bank of Viet Nam – Binh Duong Branch showed that foreign deposits into credit institutions reached nearly VND 6,400 as exchanged at 19% higher than previous term. In recent days, USD moblization in commercial banks is tending to increase rapidly. People are prompted to deposit for higher interest rates in the face of limitation by functional agencies against uncontrolled market.
Import establishments are facing difficulties due to tension of USD sources at commercial banks which are in dilemma for not being able to buy much USD.
To resolve problems of a so-called dolarization circumstances, Director Le Vu Thuy called for the State to eliminate the feelings of foreign currency preservation of organizations and individuals so that the foreign currency sources will serve economic development rather than being in savings and home custody. Besides, the State needs to offer solid and long-term measures along with inspection and punishment to resolve the problems of dollarization.
Reported by Thanh Hong – Translated by Vi Bao
