VINACHEM

The exchange rate between the Vietnam dong and the U.S. dollar has fluctuated strongly on the local currency market over the past days.

The dollar yesterday skidded slightly against the Vietnam dong after its strong rises last week, following news that the Federal Reserved (Fed) decided to keep U.S. interest rates unchanged.

Vietcombank bought one dollar at VND22,275 and sold it at VND22,345 yesterday morning, down VND5 against the end of Wednesday’s trade and falling VND15 compared to morning trade the same day. The dollar buying price fell to VND22,270 and selling price to VND22,340 at the end of yesterday’s trade.

Both Vietinbank and ACB quoted the dollar buying price at VND22,265 and their respective selling prices stood at VND22,350 and VND22,345 yesterday morning, a drop of VND10-15 from the day earlier.

When the trading day ended, Vietinbank’s respective dollar buying and selling prices were VND22,270 and VND22,350 while those quoted by ACB were VND22,260 and VND22,340.

The State Bank of Vietnam (SBV) yesterday announced the average daily interbank exchange rate between the two currencies at VND21,944 a dollar, down VND9 from the day earlier and dipping VND15 versus Monday. This means local banks could trade the dollar in a range of VND21,286 and VND22,602.

The SBV move led the dollar to depreciate when yesterday morning’s trade ended.

The greenback got firmer against the dong at the end of last week as investors awaited the outcome of the Fed policy meeting on September 20-21. Besides, the SBV acquired a large volume of dollars to increase the nation’s foreign exchange reserves.

A dollar was sold for VND22,324-22,328 on Wednesday morning and climbed to VND22,337-22,338 later the same day, the highest since the beginning of this year. However, commercial banks sold the greenback in the afternoon to take profit, leading it to drop to VND22,319-22,321 a dollar. At the end of the day, it bounced back slightly to VND22,325-22,326.

On Tuesday, the dong-dollar exchange rate stood at VND22,317-22,318 but inched up to VND22,325-22,326 at the end of the day.

Last week saw the average daily interbank exchange rate hovering around VND21,914-21,932.

On the informal market, the greenback appreciated against the Vietnam dong.

The annual overnight rate for dollar loans on the interbank market stands at 0.4%, the one-week rate 0.5%, the two-week rate 0.6%, the three-week rate 0.7%, the one-month rate 1% and the three-month rate 1.5%.

Dollar supply has been ample and stable at banks in recent months.

Credit institutions said the dollar strengthened against the domestic currency due to huge demand of certain customers and banks. Besides, interbank rates for Vietnam dong loans with short tenors have stayed low, at less than 0.5% per annum, which is seen as a good reason for banks to hold on to the greenback.

Data of the General Department of Customs showed Vietnam ran a trade deficit of US$322 million in the first half of this month.

In addition, the dollar has dipped sharply against other currencies on world markets following to Fed’s decision to keep interest rates unchanged but strongly signaled it could still tighten monetary policy by the end of this year as the labor market improved further.

Vietcombank Securities Company forecast the greenback would weaken in the coming time and remain stable until the first half of the fourth quarter.

Pham Hong Hai, chief executive officer of HSBC Vietnam, told a recent conference that the dong-dollar exchange rate has stayed low and would not rise significantly until the end of the year.

According to Bao Viet Securities Company, liquidity in the banking system is expected to remain ample and low inflation in the January-August period would remain this month, so the exchange rate might hover around VND22,300 a dollar in the short term.

Gold rose strongly following the Fed’s move. It climbed 1.4% to US$1,333.21 an ounce on the New York market. At home, Saigon Jewelry Company acquired a tael of gold at VND36.05 million and sold it at VND36.3 million.

The gap between the global and local gold prices was more than VND300,000 a tael. A tael equals to 1.2 troy ounces.

At the end of yesterday’s trade, SJC’s buying price went up to VND36.1 million a tael and its selling price climbed to VND36.36 million. - VNN