VINACHEM

The U.S. dollar on November 15 rose sharply against the Vietnam dong on the interbank market due partly to a widening gap between domestic and global gold prices.

The morning saw the dong-dollar exchange rate standing at VND22,340-22,342 to the dollar before climbing to VND22,352-22,355.

The reference exchange rate, set by the State Bank of Vietnam, was VND22,089, up VND19 versus Monday. This means commercial banks could trade the dollar in the range of VND21,423 and VND22,749.

The reference rate has risen since last week. Financial organizations forecast it would hover in a range of VND22,320-22,370 to the dollar this week.

The greenback has firmed up against other currencies on world markets and soared to its highest since last December, which leaves huge pressure on Vietnam’s foreign exchange market.

The dollar rise is attributable to high lending rates for Vietnam dong loans on the interbank market.

Interbank interest rates for dollar loans shot up as well, with the overnight rate edging to 0.58% per year, the one-week rate 0.72%, the two-week rate 0.86%, the three-week rate 0.93%, the one-month rate 1.12% and the three-month rate 1.5%.

Banks said the exchange rate between the two currencies depends on dollar supply and demand. Supply is ample now but banks are worrying the dollar may appreciate against the dong at the end of the year due to bigger demand for payments.

Moreover, the dollar has strengthened against other currencies since Donald Trump won the U.S. presidential election.

U.S. President-elect Donald Trump’s economic policy is expected to support the U.S. economy to recover. There is a high possibility that the Federal Reserve (Fed) will hike U.S. interest rates in December given positive economic data.

Expectations of a Fed rate hike also buoyed the dollar appreciation. Oil producers are keeping a close eye on the U.S. oil reserves and the next steps of major petroleum exporting countries over output cuts in the coming time.

Meanwhile, gold has gained 0.9% to US$1228,56 an ounce on the New York market after its declines earlier. At home, Saigon Jewelry Company bought a tael of gold at VND35.7 million and sold it at VND35.95 million at the close on November 15, up over VND200,000. A tael equals to 1.2 troy ounces.

The domestic gold price was VND2.8 million a tael higher than the global level. - SGT