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sigmoid · Joined: 21 Jan 2003 Posts: 1276

Vietnam hikes interest rates and devalues currency

http://www.financeasia.com/article.aspx?CIaNID=117513&r=rss

...inflation came in today at 4.4% year-on-year against 3.0% year-on-year last month...

...the currency kept weakening in the black market...

The State Bank of Vietnam also reset the US dollar reference rate to 17,961 dong from its current level of 17,034 dong, in its third devaluation of the currency in two years.

...to correct the difference versus where the dong is trading on the black market, which has been at about 19,700 per US dollar in recent weeks.

Investors were spooked by the moves, with the Ho Chi Minh City Stock Exchange's VN Index falling 4.5% to a three-month low of 503.41, the biggest slide since April 20. But most analysts praised the government's efforts as prudent.

At 4.4%, consumer price inflation is at its highest since May and more than double the multi-year low of 2% in August.

Also consider that total outstanding loans are currently up 34% versus this time last year, which means the nation is grappling with a rising credit problem.

"In summary, inflation is heading higher which, together with the recent and alarming deterioration in the trade deficit and associated downward pressure on the currency, has finally triggered a policy response from the authorities. The response is also most unlikely to be the last," wrote Robert Prior-Wandesforde, senior Asian economist for HSBC, in a research note yesterday.

blateson · Joined: 12 Mar 2006 Posts: 144

and folks, all the money you've been making in the 16,000 and low 17,000 range has just taken a big hit, especially considering that almost always when you want to send money overseas or take it out you have to do so with the black market at significantly higher rates.

by the way, I wonder if all the currency exchanges are still ripping off foreign travelers by selling them dong at the low value, then giving them dollars at the astronomical rate. Vietnam.

Green Acres · Joined: 06 May 2009 Posts: 260

blateson....you better believe it! It sure beats sitting in a classroom!! Money for nothing, and the.....! Gotta love it!

sg9015 · Joined: 03 Sep 2009 Posts: 69 Location: Saigon

I got 19.300 this morning. Luckily we get paid in USD but I had the same kick in the balls last year when earning in the local currency and they devalued it 25% overnight.

foozle · Joined: 14 Feb 2008 Posts: 18

I discovered this this afternoon, as I was checking out the rates at some gold shops in preparation for a trip back to the UK. For this to happen now - before Christmas when I, and I'm sure many others, will be heading home for the holidays - is a real bummer.

I also found out today that the bank rates are generally better for buying USD/UKP, but the banks I tried won't sell to foreigners. They wouldn't sell to my girlfriend either, without a plane ticket and passport with visa as evidence of her intent to travel. Given the state of the Vietnamese currency, I can understand this enforcement.

Presumably, I'll get the bank rate if I wire the money home. But since a lot of my money has been earned from a cash in hand language centre, I won't be able to do this for all of the money I need to take home (although I'm trying to get some form of documentation from them to show I've legally earned some of it, since apparently the money has been taxed).

Anyway, for now it's looking like I'll have to bite the bullet and use the gold shops.

Does anyone have any gold shops they recommend?
I was surprised to see how much the rate can differ from place to place when I was checking this afternoon.

sg9015 · Joined: 03 Sep 2009 Posts: 69 Location: Saigon

Hi, I don't have any idea about gold shops but which city are you in anyway?

I know that you have tried the banks but have you tried the black-market street counters?

foozle · Joined: 14 Feb 2008 Posts: 18

Sorry. I'm in HCMC.

By gold shop, I mean jewellery store. I tried one street counter at the end of Le Loi. It was at the entrance of Eden mall near the theatre. If I remember, the rate there was a little better. But I don't know of any other street counters to check. Do you have any recommendations?

sg9015 · Joined: 03 Sep 2009 Posts: 69 Location: Saigon

I've used the same one at the entrance to Eden Mall up until a few weeks ago when they ripped me off on a Baht currency conversion. So short sighted of them as I told them that they would miss out on 2 years worth of regular dollar conversions if they did so.

I've started using one a few doors further west which has the same rates. I also used one opposite Ben Thanh Market on the west side at the junction with Nguyen An Ninh. I think they do jewellery too. They had a good dollar rate which surprised me beings as it is so close the the market of evil!

blateson · Joined: 12 Mar 2006 Posts: 144

foozle · Joined: 14 Feb 2008 Posts: 18

sg9015, thanks for letting me know about those two other places. I'll check them out when I exchange my money.

Blateson, which bank is that? That really blows. And do you know if those restrictions are also placed on British Pounds?

blateson · Joined: 12 Mar 2006 Posts: 144

Fooz, first my apologies if it seemed like I was being rude. That bank was ANZ, at Me Linh square, although they are relocating to Kumho plaza, I heard. I would think you'll have a lot better luck with Br pounds. Speaking of that, they have another silly rule: you can only exchange & send money with them either in US dollars or the money of that country it is going to, silly if you ask me (i.e. I asked if I could have Aus dollars sent to me while in Thailand, they said no. -btw I'm not Aussie.) I don't think this applies however if you go to the black market, exchange there, then do the wire yourself, but it might so hafta check. The Vietnamese seem to enjoy making as many rules as they can, without explanations.

deessell2 · Joined: 11 Jun 2005 Posts: 132 Location: Under the sun

Have you thought about getting an International Debit card attached to your dong account?

Leave the money in your Vietnamese account and when you are home or overseas just withdraw your cash from the ATM. At least you will be buying the 'hard currency' at bank rates, not 'black market' prices and there is only one currency exchange. It seems the easiest and cheapest way to do it.

foozle · Joined: 14 Feb 2008 Posts: 18

Blateson, you definitely didn't come across as rude, so no worries. Yes, hopefully they won't be so strict with Pounds. As for only being able to send Dollars or the currency of the country you're sending money to, I think that might have more to do with the banks who are receiving the money. My British bank told me that they can only receive pounds since they don't exchange money upon receiving it. Money is only exchanged when it's sent. At least, that's what they told me.

sigmoid · Joined: 21 Jan 2003 Posts: 1276

Keep an eye on the situation folks... Shocked

Vietnam dong rates rise; banks curb new loans

http://www.thanhniennews.com/business/?catid=2&newsid=54215

CThomas · Joined: 21 Oct 2009 Posts: 380 Location: HCMC, Vietnam

Does anyone know of a bank that operates both in the US and Vietnam? I use Wells Fargo and they don't operate in Vietnam. I heard citibank might? I'll probably switch banks before I take off for HCMC (in 2 weeks!) if someone can recommend a good one.

It seems a good way to deal with this is to put all the money in one international pot at the same bank. At least one would avoid some exchange fees, I'm guessing.

How's my logic, btw?