Unofficial market for foreign currencies in Hanoi has been reduced to almost nothing after recent new regulations.
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| Unofficial market bustling before crackdown |
The State Bank of Vietnam (SBV), the country’s central bank, has been coordinating with authorities to tighten control over unofficial trading in foreign currencies,particularly USD.
After a case where authorities caught a shop red-handed while attempting to illegally trade USD400,000 in Hanoi on March 8, shops at Ha Trung Street, known as a centre of foreign currency exchange in Hanoi, are almost empty.
Would-be USD buyers simple receive a firm “no” from these foreign currency exchange shops, or are guided to commercial banks for official transactions.
When being asked, an official of a shop at No. 39 Ha Trung said, “We no longer trade foreign currencies, now we\'re just sticking to gold.”
Quoc Trinh, a famous foreign currency exchange shop, has halted operations.
As of the morning of March 11, the unofficial foreign currency market in Hanoi was almost frozen.
Answering by phone, an official of Bao Tinh Minh Chau Co., Ltd, a prestigious firm dealing in gold and precious stones, said, “We have stopped trading in USD for some days and have not yet made any plans for resuming.”
Tran Bac Ha, Chairman of Bank for Investment and Development of Vietnam (BIDV) said the VND/USD exchange rate may be stabilised in the time to come if all USD sources in the country are gathered in the banking system and if the USD credit growth rate is curbed to under 20%.”
To this end, BIDV has proposed SBV to tighten USD trading policies for state-owned economic groups and corporations by requiring them to resell their USD to banks after finishing their business deals, Ha noted.
He added that SBV should lower the interest rate for USD deposits to a maximum of 1% per annum. Such move is expected to prevent the increease in interest rates for VND deposits and reduce USD speculation.
The unofficial market for gold bars has also been brought under tighter restrictions by the SBV.
