Posts Tagged ‘dollarization’

State Bank of Vietnam plans to increase dong to dollar value

Posted: August 15, 2011 in Asian Currency Markets
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Vietnam's bank notes

VietFinanceNews.com – The State Bank of Vietnam plans to increase the value of the Vietnamese dong against the US dollar over the next four months in a bid to protect the value of the domestic currency, State Bank Governor Nguyen Van Binh told Sai Gon Economic Times this week.

“Since February, the real value of Vietnamese dong has risen slightly,” Binh said.

“If necessary, the central bank will consider further adjustment of the exchange rate,” he added. “The primary target of foreign exchange policy is to stabilise the dong and keep it under control, not to fix it. Confidence in the domestic currency has been fading and we must immediately restore that confidence, which is vital to economic stability.”

Binh advised the public that holding onto the dong was the best policy to keep people from flocking to invest in gold and to reduce dollarisation of the economy.

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Vietnam: Gov’t to have roadmap for reducing dollarization of the economy

Posted: April 10, 2011 in Asian Currency Markets
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VietFinanceNews.com – The State Bank of Vietnam was recently urged to put forth a roadmap for reducing dollarization of the economy, then submit it to the PM for approval in April this year, according to the Government’s Resolution No. 77/NQ-CP dated on April 3.

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Vietnam: Currency of change for banking system

Posted: April 4, 2011 in Asian Currency Markets
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VietFinanceNews.com – The State Bank is battling what it views as one of the most dangerous problems facing the banking sector: dollarisation. In late March, the bank’s Circular 07/2011/TT-NHNN, made it tougher for local enterprises to borrow US dollars.

Replacing Decision 09/2008/QD-NHNN, the circular regulates that only exporters with adequate future dollar sources can borrow dollars from lenders. Meanwhile, enterprises borrowing dollars for use within the Vietnamese market should convert to the Vietnamese dong via a spot transaction upon borrowing.

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Economist: Vietnam needs to restore confidence in dong

Posted: March 18, 2011 in Asian Currency Markets
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VietFinanceNews.com – Solving the dollarisation problem to restore the confidence in the local currency is not just closing the private foreign exchange shops, according to the Dau Tu Newspaper on March 18.

The reaction of the market after the central bank’s order to close the so-called black market is generally positive. It may not immediately delete the free FX transactions, but at least the scarcity and tension due to dollars hoarding for the speculation has been minimised. Through the analysis of dealers’ actions in foreign currency trading, hoarding and speculation to keep dollars, some groups of reasons could be mentioned as follows.

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Vietnam: Tough cure needed for ailing forex market

Posted: February 1, 2011 in Iraqi Dinar/Politics
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VietFinanceNews.com – Over the past decade, the trade deficit along with high inflation has been named as the most alarming threat to Vietnam’s macroeconomy and to monetary management. From a monetary aspect, the question is how will the exchange rate mechanism help cure this pain?

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Vietnam central bank halts two-dollar bill rush

Posted: January 24, 2011 in Asian Currency Markets
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VietFinanceNews.com – Vietnamese banks have ceased exchanging large-denomination dollar banknotes for two-dollar bills, local media reported Thursday.

On December 12, Saigon Commercial Bank launched the program to meet the demands of locals that prefer the greenback for use as li xi (lucky money) during the Lunar New Year festival, which begins early next month. Other lenders followed suit.

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Vietnam: Banks stop two-dollar bill exchange services

Posted: January 22, 2011 in Asian Currency Markets
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VietFinanceNews.com – Local banks have stopped exchanging big-denomination dollar notes for two-dollar bills as ordered by the State Bank of Vietnam just ahead of Tet, or the Lunar New Year, which falls early next month.
During the celebration of Tet, it is a Vietnamese custom to put money in red envelopes to donate to pagodas or give them as lì xì (lucky money) to relatives, especially children.

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Vietnam: Banker lends a hand to “dollarisation”?

Posted: December 17, 2010 in Asian Currency Markets
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VietFinanceNews.com – The information that a bank in Vietnam offers to provide 2-dollar banknotes to people has immediately sparked criticism of “lending a hand to the dollarisation” in Vietnam.

Several days ago, Saigon Bank (SCB) announced that it will provide 2-dollar banknotes to those, who want to use them as li xi (the lucky money given to children or to others as presents on Tet).

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