The foreign exchange rate between Vietnamese dong and the US dollar on November 17 rose to its highest level since June 30, hitting 21,380 VND to the dollar amid soaring demand from enterprises near the end of the year.
Sacombank sold US dollars at the highest price while other commercial banks like Eximbank, Asia Commercial Bank (ACB), Vietnam International Bank (VIB) and Bank for Investment and Development of Vietnam (BIDV) also had high rates, ranging from 21,290-21,320 VND for the bid rate and 21,370-21,375 VND for the ask rate. The selling price at Vietcombank was the lowest at 21,360 VND to the dollar.
The rate has risen since November 7 and gained 45-50 VND in just 10 days. The buy/sell rate on the black market has also climbed to 21,400-21,430 VND.
Market insiders attributed the rise to increasing lending. Credit growth in the banking system expanded 8.63 percent as of the end of October, of which foreign currency lending made up a significant proportion with an impressive increase of over 20 percent. Lending is expected to continue expanding in the last two months of the year due to high demand for raw materials and goods ahead of Tet.
VIB Deputy General Director Le Quang Trung told Dau Tu (Investment) newspaper that foreign currency lending had been growing due to stable forex policy and the large interest arbitrage between dong and the dollar.
Governor of the State Bank of Vietnam (SBV) Nguyen Van Binh promised early this year that the exchange rate between the two currencies would not increase more than 2 percent in 2014.
According to analysts, most banks had abundant capital available for lending and the pressure of completing profit targets was forcing them to expand lending, particularly in foreign currency.
Economist Le Xuan Nghia said strong growth of foreign currency loans was a good sign, indicating the expansion of import-export activities.
Responding to worries about the rising forex rate, representative of the central bank said supply and demand for foreign currency was balanced and under control of the central bank.-VNA
Sacombank sold US dollars at the highest price while other commercial banks like Eximbank, Asia Commercial Bank (ACB), Vietnam International Bank (VIB) and Bank for Investment and Development of Vietnam (BIDV) also had high rates, ranging from 21,290-21,320 VND for the bid rate and 21,370-21,375 VND for the ask rate. The selling price at Vietcombank was the lowest at 21,360 VND to the dollar.
The rate has risen since November 7 and gained 45-50 VND in just 10 days. The buy/sell rate on the black market has also climbed to 21,400-21,430 VND.
Market insiders attributed the rise to increasing lending. Credit growth in the banking system expanded 8.63 percent as of the end of October, of which foreign currency lending made up a significant proportion with an impressive increase of over 20 percent. Lending is expected to continue expanding in the last two months of the year due to high demand for raw materials and goods ahead of Tet.
VIB Deputy General Director Le Quang Trung told Dau Tu (Investment) newspaper that foreign currency lending had been growing due to stable forex policy and the large interest arbitrage between dong and the dollar.
Governor of the State Bank of Vietnam (SBV) Nguyen Van Binh promised early this year that the exchange rate between the two currencies would not increase more than 2 percent in 2014.
According to analysts, most banks had abundant capital available for lending and the pressure of completing profit targets was forcing them to expand lending, particularly in foreign currency.
Economist Le Xuan Nghia said strong growth of foreign currency loans was a good sign, indicating the expansion of import-export activities.
Responding to worries about the rising forex rate, representative of the central bank said supply and demand for foreign currency was balanced and under control of the central bank.-VNA
