High dollar price “feeding up” Vietnam banks

Businesses complain that the “dual foreign currency price mechanism” is still persisting.

Businesses complain even though the State Bank of Vietnam has raised the official exchange rate to narrow the gap between the official exchange rate and the black market’s exchange rate.

The dong/dollar exchange rate on the black market on February 18 jumped to 22,150 dong per dollar. The exchange rate on the official market was also very high.

Right after the State Bank released the decision to devalue the dong 9.3 percent by raising the interbank exchange rate from 18,932 dong per dollar to 20,693 dong per dollar, most banks raised the quoted dollar price to 20,940 dong per dollar, the ceiling dollar price level. Under the current regulations, the dollar price quoted by commercial banks must not more than three percent higher or lower than the interbank exchange rate announced by the State Bank.

However, businesses complained that banks seem to still be unsatisfied with the price increase and are selling dollars at the prices higher than the quoted levels. A lot of commercial banks now collect “foreign currency transaction fees”, which makes the actual dollar prices much higher than the quoted price levels.