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LettersAthruZ
Joined: 25 Apr 2010
Posts: 466
Location: North Viet Nam
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 Posted: Wed Jul 31, 2013 4:13 pm Post subject: Re: Moving to Vietnam with $50k cash - any problems? |
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| TRH wrote: |
| LettersAthruZ wrote: |
| Given how the Dong has lost 25% or more of its value against the USD over the last five + years I've been here, are you SURE that this is a good idea?? |
While it is of concern, I don't think it is as bad as you say. XE.com pegs the 10 year change at 3.8%/yr, 5 year at 5.39% but last year at 2.06%. These numbers are 1/8 to 1/8. The perception may be worse than the reality because there are periods of relative stability followed by big jumps such as Feb 11. Actually the inflation rate is the problem. Last year it was about 7% and is forecast for the same but has had spikes over 20% in the last few years. (I could not find a calculation device and didn't try to work out the monthly numbers I found.) If you add the recent exchange rate loss to the current inflation rate you are over 9% so if you lock VND up in one year CD's you are about breaking even.
In the US the "official" inflation rate is about 1.8% so if you have deposits at .5% you are loosing 1.3%. However if you keep your funds there and bring them as needed they could be worth 4.5% less per year than if you brought them here. That is +0.5%(US savings rate) +2.06% (exchange rate gain) -7% (VN inflation). Help me if my math is wrong. I am an English teacher. 
Info sources: http://www.xe.com/currencycharts/?from=USD&to=VND&view=1Y
http://www.tradingeconomics.com/vietnam/inflation-cpi
http://www.usinflationcalculator.com/ |
Good point, TRH - I just simply went on personal observation and raw numbers on the XE exchange rate, whereas in Spring 2008 (to the best of my dodgy memory), one U.S. Dollar bought you 14,600VND AT THE BANK (Black Market rates higher, of course) and, the last time I checked, one U.S. Dollar today is around 21,150VND or so FOREX - so I just used value of VND against the USD over the past five-plus years and came out with a 31% loss, that, personally, I don't see being regained anytime in the near future!
I didn't even bother going into inflation here.....
Thanks for the tip, though - I had no idea that XE even had those time-measurement tools on their website!! Turns out my MEMORY IS DODGY (as it was 16,000VND/$1USD in 2008)....still, that's a 24% loss..... |
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half moon
Joined: 17 Jul 2007
Posts: 49
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| Posted: Wed Nov 20, 2013 4:57 am Post subject: |
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edited.
Wront thread. |
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