Greenback rates soar at domestic commercial banks on April 3. — Photo Vietstock.vn

HA NOI (Biz Hub) — Greenback rates kept soaring at domestic commercial banks on April 3, and the gap to the ceiling price set by the State Bank of Viet Nam (SBV) narrowed.

The highest rates were seen at VietinBank, which bought a single US dollar at VND21,575 and sold it at VND21,635, and Techcombank, which listed the buy/sell rates of VND21,555 and VND21, 635 respectively. Eximbank also rated each dollar at 21,635 on the buying side and VND21,575 on the selling side.

At the same time, Vietcombank listed its buying and selling rates per dollar of VND21,550 and VND21,610 respectively.

BIDV listed each dollar at VND21,570 to buy and VND21,630 to sell, while other commercial banks of ACB, DongABank and Agribank listed buying rates between VND21,545 and VND21,575 and selling rates between VND21,620 and VND21,630.

The rates in the flea market also remained as high as they were in commercial banks. Quoc Trinh Gold and Jewelry Company on Ha Trung Street, which is popular for money exchange in Ha Noi, bought each dollar at VND21,640 and sold them at VND21,670 each on Friday.

As of January 7, the SBV increased the inter-bank exchange rate from VND21,246 to VND21,458 per US dollar. With an effective exchange rate with a one per cent margin, the ceiling rate was VND21,673 per dollar.

Thus, the gap to the ceiling price was only VND40 at the commercial banks and VND3 at the flea market.

Last week, the SBV confirmed that the demand and supply of foreign currency were stable in the market, adding that speculation psychology among the local investors had lifted the rate. The central bank confirmed the rate would not be increased any further for now and that the bank still planned to increase the VND/USD exchange rate by no more than 2 per cent in 2015.

This message was repeated on April 1, but the greenback rates have continued to soar in the local market.

Data from the Viet Nam Customs Office said Viet Nam export turnover had reached $22.97 billion and import turnover had reached $24.18 billion in the first two months. The trade deficit of $1.2 billion was also considered a reason for the soaring prices.

Economist Nguyen Tri Hieu told Infornet.vn that rating up the VND/USD exchange could bring some benefit to local exports, but it would simultaneously have a greater negative impact on the whole economy.

Hieu said the move would negatively influence imports and the macro economy, leading to an increase in the foreign debt of both the government and local enterprises.

Hieu cited an estimate from the Ministry of Investment and Planning which demonstrated that if the rate was stepped up by another 1 per cent, VND10 trillion (US$462.3 million) would be added to the public debt. The economist said with the public debt closing in on 65 per cent of the GDP, any increase in debt would be too burdensome on the local economy.

However, Hieu also thought that the SBV should closely watch the forex movement in the country and across the world to consider an increase when it is necessary.

According to Reuters.com, on April 3, the dollar was slightly firmer against a basket of major currencies after two days of losses fuelled by anticipation that the US employment report may disappoint. Trading activity was expected to be lean with most markets, including those in the United States and Europe, shut for the Good Friday holiday. — VNS