Gold, dollar price stable, preventing speculators from making money
The gold and dollar markets worth tens of billions of dollars have remained stable despite fluctuations in the world market.
Contrary to all predictions, the dong/dollar exchange has been stable since the beginning of the year. Vietcombank on May 11 quoted the buy and sell prices at VND22,685 per dollar and VND22,755, respectively, a decrease of 0.15 percent compared with the beginning of the year.
The dollar price dropped more sharply, by 1.5 percent, in the free market, now hovering around VND22,760 per dollar (buy) and VND22,780 (sell). No big fluctuations in the market have been reported in the last four months.
The stability and dollar price downward trend have rarely been seen in the Vietnam forex market.
Earlier this year, experts all predicted that the Vietnam dong would be under pressure to depreciate this year. The dollar was expected to appreciate because of the US FED’s plan to raise the prime interest rate.
The State Bank of Vietnam (SBV) has continuously adjusted the dong/dollar exchange rate recently.
The official exchange rate announced by SBV on May 11 was VND22,377 per dollar, or one percent higher than earlier this year. The dollar price for reference at SBV’s Exchange is also high, at VND23,028 per dollar, or just VND20 per dollar lower than the ceiling price level.
With the wide gap between the real dollar market price and the ceiling price level at VND290 per dollar, SBV doesn’t have to sell dollars to intervene in the market and it can buy dollars to increase the reserves.
Like the forex market, the gold market also has remained calm. The gold price has decreased and there has been no ‘price fever attack’ so far this year.
There has been no wave of collecting gold in large quantity. It is estimated that 500 tons of gold, worth $20 billion, is being kept by people.
Analysts commented that the stability of the dong/dollar exchange rate and the gold market is good news for the domestic finance market, as it helps enterprises plan their business, while there is no need to worry about the depreciation of the currency and interest rate increase.
Le Quang Tri, a senior executive of Tri Viet Securities, commented that the SBV’s move of adjusting the official exchange rate is a reasonable exchange rate policy which regulates the market towards the goals it set: curbing inflation at 4 percent this year in the context of the anticipated dollar price increase as the US FED plans to raise the prime interest rate 2-3 more times this year.
M. Ha, VNN