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baygioimdi
Joined: 28 Jan 2011
Posts: 44
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 Posted: Tue Feb 01, 2011 4:44 am Post subject: |
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I think it is necessary to give more details in case some people dont understand the issues.
Renting a house/room/apt etc
The majority of rental contracts in Vietnam are in USD and agreed at a certain exchange rate. The exchange rate is generally if not always the official rate of the State Bank of Vietnam. Right now the official rate is 19,500. Landlords would not use another rate such as 20,000 because there is a possibility that they may lose money if the Vietnamese Dong is devalued to more than 20,000 etc.
Landlords do not have problem with using the State Banks rate if they can buy USD on the black market at a rate similar to the Banks rate. So for most of the year there are no complaints from landlords because they only have to pay 50-200 Dong more than the Bank rate. However, when there is a large difference between the two rates, as is the case now, some of them want to be paid in USD or increase the exchange rate to the black market rate. This is against the law and a scam, of course, do not agree to this.
As another poster stated it is against the law to have rental contracts in USD and I have never seen one or heard of anybody signing contracts in USD.
Obtaining USD in Banks.
Right now you can't get USD at any of the banks unless you are a foreigner and it is stated in your employment contract that you will be paid in USD not Dong. Vietnamese citizens are not allowed to have contracts in USD. Most, if not all EFL teachers do not have contracts in USD. Why do you need USD. You can buy other currencies(euros, GBP,etc etc at any bank at the official exchange rate and if you must have USD, one can change the other currency in another country and will lose very little-.001% or less. This is what I do when I can't get USD.
Using Credit cards abroad
One can get USD from your ATM card abroad but I would not recommend it. All of the banks will charge you fees etc and it will cost you more than the black market rate. I know because I have done it using ATM cards from Vietcom Bank, HSBC and SCB and it was the same with all of them.
Also do not forget that HSBC, A and Z, SCB in Vietnam are independent banks and not affiliated with their banks in other countries. |
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Kornan DeKobb
Joined: 24 Jan 2010
Posts: 242
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| Posted: Wed Feb 02, 2011 5:12 pm Post subject: |
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| DNK wrote: |
I am still puzzled by the idea that paying the black market rate is getting "squeezed". If you negotiate in dollars, the owner expects payment in dollars, the owner expects to be able to trade in said dollar payments for X dong. Why should you feel "squeezed" when he decides to ask for that same X dong when you change payment into another currency unilaterally? Unless it clearly states in the (illegal) contract that you can change currencies to dong/etc at a given rate (ie, official rate), that is.
The official exchange rate is a joke, obviously, so 'sticking to your guns' on it is just "asking to pay 8-10% less" for an already agreed upon contract (I assume you would neg any new contracts in the currency you are paying in). Sounds like reneging to me.
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What are you talking about? My salary is quoted in USD, but I am paid the equivalent in VND - at the official rate. My rent is quoted in USD, but I pay in VND - and my landlord asks for the black market rate. I stuck to my guns and insisted on the official rate, and he finally agreed - and I was right. But it was unpleasant to have to argue it.
Alternatively, tell my employer to pay me at the black market rate.
And even if two consenting adults agree to an illegal contract, without specification, why should it be assumed that the official rate will NOT be followed? |
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sigmoid
Joined: 21 Jan 2003
Posts: 1276
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| Posted: Fri Feb 04, 2011 7:02 pm Post subject: |
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Here are a couple of recent follow-up articles:
A bank in Cambodia has stopped certain Vietnamese from getting dollars from its ATMs after a surge in withdrawals, apparently by traders taking advantage of a drop in the black market value of Vietnam's currency, the dong.
http://www.reuters.com/article/2011/02/02/cambodia-dollars-idUSSGE70U05P20110202
Vietnam's dollar trade: Cleaning out the register
http://www.economist.com/blogs/asiaview/2011/02/vietnams_dollar_trade
some excerpts:
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...by last month this �scam� (really a rudimentary form of currency arbitrage) had been shut down, with Vietnam�s Techcombank, which had enabled it by charging particularly low fees for foreign-currency transactions, raising its rates across the board to deter the day-trippers.
Dollars can be hard to come by in Vietnam�automated cash machines do not offer them and banks limit the amounts that can be withdrawn. The official rate as fixed by the government is 19,500 dong to the dollar, while on the black market they sell at some 21,000 dong.
With institutions like Techcombank being obliged to use the official Vietnamese rate, and adding only low surcharges on withdrawals, the day-trippers were making good money reselling their Cambodia-bought dollars for dong on the black market. The FT calculated their profit at around 5% per transaction.
Most of Vietnam�s black-market traders work out of gold shops�the gold trade is also tightly controlled by the government�but some travel companies and independent traders also deal in hard currency.
Why did nobody think of this obvious trade till recently?
Partly it is to do with the situation back in Vietnam: inflation is at about 12%, the dong has already been devalued several times and it looks likely that it will be again soon. Patriotic as citizens may be, they do not always trust their nation�s currency. Many like to keep handy reserves of a more readily exchanged currency, like the "greenback" �or gold, for that matter.
The ban on dollars in Vietnam is, the official line goes, to force the use of the dong, in the interest of keeping it stable. However the wide spread between the official and black-market rates, coupled with the availability of dollars just across an open border, has forced a false demand for the dong�never a good thing in a country already struggling with economic uncertainty and accelerating inflation.
Gavin Greenwood, a Hong Kong-based security analyst for Allen and Associates, told me that ordinary people are learning ways to deal with economic uncertainty in the face of the state�s oftentimes inept interference. He said they can be expected to �increasingly ignore the strictures of the party and effectively operate as far as possible in alternative economies that provide a safety value�. This will come �at the cost of the party�s credibility and economic strategy.�
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DNK
Joined: 22 Jan 2007
Posts: 236
Location: the South
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| Posted: Tue Feb 08, 2011 1:32 pm Post subject: |
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What are you talking about? My salary is quoted in USD, but I am paid the equivalent in VND - at the official rate. My rent is quoted in USD, but I pay in VND - and my landlord asks for the black market rate. I stuck to my guns and insisted on the official rate, and he finally agreed - and I was right. But it was unpleasant to have to argue it.
Alternatively, tell my employer to pay me at the black market rate.
And even if two consenting adults agree to an illegal contract, without specification, why should it be assumed that the official rate will NOT be followed? |
1) You agreed to have a salary quoted in USD rather than VND. This has nothing to do with your landlord.
2) You (assumedly) signed the rental contract quoted in USD and then chose to pay in VND without, apparently, coming up with clear terms on the exchange rate before signing. You and your landlord failed to work out a full contract before signing. Live and learn. The legal system here isn't your home country's, people expect black market rates and make illegal contracts, and it's somewhat common. Live and learn.
I quite understand why everyone is upset over this, I just think getting upset with landlords is a bit silly.
I don't think it should be assumed that a contract is market rate unless otherwise said. That said, if the contract doesn't specifically state what its USD price is to be pegged to when paying in another currency, it will be up for negotiation at a later time. Basic point here: negotiate fully at signing or deal with a far more awkward and heated negotiation when the time comes for your payment.
Regarding how you are paid: again, you agreed to the contract. Instead of asking to be paid in the market rate, ask for an extra 10% at signing by explaining that many services are charged at the black market rate and you're concerned over inflation (look at that, solid negotiating tactic, AND you can reverse it for your landlord even if it works with your employer, hihi). Ask to renegotiate the pay every few months due to inflation concerns (might be the norm for you company anyway).[/quote] |
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Danaa
Joined: 10 Jul 2007
Posts: 40
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| Posted: Tue Feb 08, 2011 3:35 pm Post subject: |
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| DNK wrote: |
| Regarding how you are paid: again, you agreed to the contract. Instead of asking to be paid in the market rate, ask for an extra 10% at signing by explaining that many services are charged at the black market rate and you're concerned over inflation (look at that, solid negotiating tactic, AND you can reverse it for your landlord even if it works with your employer, hihi). Ask to renegotiate the pay every few months due to inflation concerns (might be the norm for you company anyway). |
[/quote]
No school would do this. None. |
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baygioimdi
Joined: 28 Jan 2011
Posts: 44
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| Posted: Tue Feb 08, 2011 4:14 pm Post subject: |
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It seems that some of the comments on this thread are from people who do not live in Vietnam.
I will repeat what I have already written, there are very few rental contracts in USD which are not pegged to VND. And most are pegged to the exchange rate of the Bank of Vietnam. If the contracts are not pegged to the Vietnamese Dong, Vietnam law states that the exchange rate is the State bank of Vietnam,s rate. If a landlord tries to have a foreigner or Vietnamese sign a contract in USD only, it's very simple, that landlord is dishonest, a criminal and focuses on short term relationships, the usual relationships in Vietnam.
I am married to a Vietnamese, have children and have been living in Vietnam since 1992. I have never had to pay the black market rate for
services in Vietnam. If someone is paying the black market rate for any service, please let us know what services. There may be one service, the service in a bia om etc, however, that's generally not the case.
I should also mention that my labour contract is in USD and I am paid in USD. However, I can't go to the bank and get USD. I can only get Vietnamese Dong at the official exchange rate.
It's nothing but a fantasy concerning negotiating with your company about black market rates etc etc,. Let's deal with the real world.
Cheers |
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DNK
Joined: 22 Jan 2007
Posts: 236
Location: the South
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| Posted: Tue Feb 08, 2011 4:47 pm Post subject: |
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No one in this thread has proposed that schools would negotiate in black market rates, so it would appear we are all in agreement there. I'm glad many people have attacked this heinous heretofore unclaimed claim, though. It needed to be attacked in all its overt non-mention 
The issue on services. Who cares if it's just your apartment? Just use it as a negotiating tactic. The only other services I can think of are motorbike rentals and hotels. Obviously, for someone who has been here a long time, neither applies, but again the other party at the negotiations doesn't need to know that. You could probably plausibly add some more if you're worried about the employer's negotiator calling you on it.
| Danaa wrote: |
| No school would do this. None. |
Allow you to negotiate a 10% higher contract than their initial offer or allow you to renegotiate pay every 3 or 4 months? |
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baygioimdi
Joined: 28 Jan 2011
Posts: 44
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| Posted: Tue Feb 08, 2011 7:48 pm Post subject: |
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Regarding paying black market rates for other services such as hotels or motorbike rentals, I have never heard of it. For example, if one stays at 5 star hotels in Vietnam, the price is quoted in USD and by law and in reality, you have a choice to pay in usd or Vietnamese dong at the official exchange rate. Of course, regarding any service, they can ask you to pay any rate in any currency they want but it does not mean that you have to agree. One can pay 20 usd for a coffee if one chooses. However, if they ask you to pay a higher exchange rate after you have used the service and did not notify you before, all you have to do is pay the official exchange rate and walk and you will have no problems.
If one tries to negotiate a higher salary based on the possibility that one has to some times pay black market rates for services, any employer will laugh in your face. It depends on the individuals ability to negotiate and nothing else. The best technique for negotiating higher salaries is to discuss inflation, which is objective not subjective. However, this is a problem everywhere in the world. For example, in the usa, salaries have not increased for over 30 years for 90% of the workers if you include inflation.
Take care |
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baygioimdi
Joined: 28 Jan 2011
Posts: 44
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| Posted: Tue Feb 08, 2011 9:53 pm Post subject: |
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I forgot to include the following in my previous post.
If you are renting a house and you have signed a contract and your landlord tries to force you to pay him or her in usd or at the black market rate, all you have to do is threaten to go to the local police and make a complaint.
Most landlords will stop the threat immediately, this is because most landlords have two contracts. One contract for the renter and another for the local police. All landlords must pay a bribe to the local police if they want to rent their house to anyone including both foreigners and Vietnamese. The landlord will show the local police a fake contract with a lower rental price so they can reduce the bribe. The local police will not be happy when you show them the real contract with a higher rental agreement and will contact the landlord and demand more money. Believe me, it will probably work, I have done it before. Living in and loving Vietnam since 1992, as they say, the greatest weapon in the world is knowledge!
Cheers |
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sigmoid
Joined: 21 Jan 2003
Posts: 1276
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| Posted: Wed Feb 09, 2011 4:11 am Post subject: |
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Well, I think the point is that in normal countries this issue never arises since there is one official rate of exchange and people are free to buy or sell dolllars and other currencies freely at this one official bank rate. Are there any other countries where this situation exists? Why allow a system that consistently undermines the value of your currency and creates headaches for people, especially foreign visitors or residents? Is there a logical reason or is it just a way for people to make money without producing anything?
The same goes for many other aspects of life in VN. Why not have a clear and convenient visa policy? Why have a dozen different answers to a simple question? How about work permits? Why not have a straightforward and transparent procedure for obtaining one? Taxes, rental leases, drivers licenses, etc.
Why does everything in VN have to involve negotiations, obfuscation, deceit, obtuse strategies and 'work-around's??? Why not just be normal?
Some people may enjoy playing childish games just to buy a baguette or bunch of bananas on the street, but many do not. |
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Charvo
Joined: 02 Feb 2010
Posts: 37
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| Posted: Wed Feb 09, 2011 8:05 am Post subject: |
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| sigmoid wrote: |
Well, I think the point is that in normal countries this issue never arises since there is one official rate of exchange and people are free to buy or sell dolllars and other currencies freely at this one official bank rate. Are there any other countries where this situation exists? Why allow a system that consistently undermines the value of your currency and creates headaches for people, especially foreign visitors or residents? Is there a logical reason or is it just a way for people to make money without producing anything?
The same goes for many other aspects of life in VN. Why not have a clear and convenient visa policy? Why have a dozen different answers to a simple question? How about work permits? Why not have a straightforward and transparent procedure for obtaining one? Taxes, rental leases, drivers licenses, etc.
Why does everything in VN have to involve negotiations, obfuscation, deceit, obtuse strategies and 'work-around's??? Why not just be normal?
Some people may enjoy playing childish games just to buy a baguette or bunch of bananas on the street, but many do not. |
I believe Venezuela has the same system in terms of managing its currency. Vietnam has an official bank rate that caps the exchange rate to put a downward force on inflation. ONLY companies that import essential goods (petrol, gas, etc.) get money at this rate when it hits the top of the trading band. Companies that want to import Iphones, cars, and other non-essential goods have to go to the gold shops to get their dollars.
Back in 2008, the black market rate stayed way above the official bank rate for quite some time until the central bank had to push interest rates up to encourage people to sell dollars and get into VND. I think we have a replay of 2008 with massive increases in the prices of goods.
To say that the landlords are doing something illegal by asking for the black market rate is kind of absurd in my view. Everyone does "illegal" stuff in VN. Everything is up for negotiation. If the landlord specifically said he is going to take only the black market rate at the beginning of the lease, it just makes sense for the renter to pay the black market rate. Whatever the government says is the official rate has no bearing on the citizenry.
For my sake, I hope the government devalues the VND and aligns the official rate closer to the black market rate. However, inflation is very high now. They might not do it. |
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toiyeuthitmeo
Joined: 21 May 2010
Posts: 213
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| Posted: Wed Feb 09, 2011 12:33 pm Post subject: |
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We've all heard so much about inflation in this country, and the CPI rising and all of that, but I was wondering if some of you could give me some personal examples of price increases in those mundane items that reflect daily life here?
I've been around in Vietnam for a handful of years and have honestly not run into too many situations where I've been shocked or even noticed dramatic price increases. It may be that prices have crept up slowly enough for me not to notice, or that my income is comfortable enough that I haven't noticed, but really, there are many things that I think haven't changed much.
I can still get com suon for 18,000. I can still get a full tank of petrol in my motorbike for around 50,000. I can still get a beer at a bar for 25,000, even 15,000 if I go to the right places, and a can of trusty (nasty) 333 is still 8000 warm and 9000 cold from the right tap hoa. Finding a spacious and nice (shared) house to live still hasn't changed from the $150-$250 range/person that it was when I arrived. What else? The simple mobile phones that I prefer have actually gotten cheaper. Taxi fare seems about the same too.
Unlike many, I actually cook at home for the majority of my meals, and do a combination of shopping at the Western-style supermarkets and Viet markets. Again, can't really say that the same amount of money is really going less distance these days.
Anyone have some good examples of price increases?
Thanks. |
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Charvo
Joined: 02 Feb 2010
Posts: 37
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| Posted: Wed Feb 09, 2011 2:20 pm Post subject: |
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| toiyeuthitmeo wrote: |
We've all heard so much about inflation in this country, and the CPI rising and all of that, but I was wondering if some of you could give me some personal examples of price increases in those mundane items that reflect daily life here?
I've been around in Vietnam for a handful of years and have honestly not run into too many situations where I've been shocked or even noticed dramatic price increases. It may be that prices have crept up slowly enough for me not to notice, or that my income is comfortable enough that I haven't noticed, but really, there are many things that I think haven't changed much.
I can still get com suon for 18,000. I can still get a full tank of petrol in my motorbike for around 50,000. I can still get a beer at a bar for 25,000, even 15,000 if I go to the right places, and a can of trusty (nasty) 333 is still 8000 warm and 9000 cold from the right tap hoa. Finding a spacious and nice (shared) house to live still hasn't changed from the $150-$250 range/person that it was when I arrived. What else? The simple mobile phones that I prefer have actually gotten cheaper. Taxi fare seems about the same too.
Unlike many, I actually cook at home for the majority of my meals, and do a combination of shopping at the Western-style supermarkets and Viet markets. Again, can't really say that the same amount of money is really going less distance these days.
Anyone have some good examples of price increases?
Thanks. |
I buy a box of food everyday. I know I've been affected by price rises. There is a dish that I used to buy for 16k dong a couple of years ago. It's 22k dong now. Then there is the corn on the cob street vendor. The price increased from 4k to 5k a few months ago. However, I am not as knowledgeable on grocery pricing as someone who does shopping on a daily basis.
Petrol is a controlled commodity in terms of pricing. If the government allowed petrol to float in terms of pricing, it would instantly rise 10% to match world prices considering the last bump up was back in September last year when crude oil was much lower. Also, the VND was stronger back then, too.
I think electricity pricing is set to be increased soon. It was raised post-Tet in 2010.
The official inflation rate for VN is 12%. Of course, that would mean true inflation is something closer to 20%. Statistics are faked here in VN just like in the USA. |
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Jbhughes
Joined: 01 Jul 2010
Posts: 254
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| Posted: Wed Feb 09, 2011 3:47 pm Post subject: |
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| sigmoid wrote: |
The same goes for many other aspects of life in VN. Why not have a clear and convenient visa policy? Why have a dozen different answers to a simple question? How about work permits? Why not have a straightforward and transparent procedure for obtaining one? Taxes, rental leases, drivers licenses, etc.
Why does everything in VN have to involve negotiations, obfuscation, deceit, obtuse strategies and 'work-around's??? Why not just be normal?
Some people may enjoy playing childish games just to buy a baguette or bunch of bananas on the street, but many do not. |
Ohh hear hear!
I'm not sure about others, but I've really had enough of having to shop around to find places that won't rip me off. I've also totally had enough of always asking the price for everything first. How many Vietnamese people go into a Quan Com BINH DAN and ask how much chicken and rice is before they sit down? It's embarrassing for both parties involved, but half the time if you don't do it, a ridiculous price will be quoted at the end.
Anyway, rant over (guess who paid too much for dinner tonight) and some Tet-related insights:
I've noticed the usual Tet price spiking to be particularly severe this year - anyone else?
I've baulked at meal prices quoted by street vendors and Quan Coms only to see very ordinary looking Vietnamese people (reluctantly!) paying the same prices.
An example:
Yesterday, I ordered some rice dish for 30odd thousand (!), having asked the price first and agreeing. A viet guy comes in a little later and orders a cheaper-type of dish (he doesn't ask the price, but it was something like a Com Suon, whereas mine was some kind of chicken rice dish).
We both eat and I'm still around when he pays. The woman asks for 25k, the guy starts fishing around for his money as if he's forgotten where he's put it. While he does this, he asks her why the price is so high, tells her the normal price is 15k and that he knows the place, the woman just waits silently. When he finally finds his money, he asks her if he can pay 15k. She says the price is 25k, he pays and leaves with a similar looking face to what mine is later, after I cough up and leave.
Other assorted prices that seem high to me (that Vietnamese, local-looking/sounding people have paid):
15k / Banh Xeo in a cheap, plastic chair, throw-paper-on-the-concrete-floor Quan.
25k / bowl Mi Hoanh Thang from a street stall.
No Pho available ANYwhere for under 20k.
Com Ga 40k in a Quan Com Binh Dan.
Com Thap Cam 30k also in a Quan Com Binh Dan, Com Suon the same.
These prices aren't in SaiGon, they across a few different provincial cities that I've been travelling through in the South and Centre.
This leads me back to Toiyeuthitmeo's point:
| Quote: |
| Anyone have some good examples of price increases? |
My experience with inflation is that the usual Tet price rise happens, there's a period of re-adjustment after Tet where some prices lower and some stay at the newer, higher level and it's the prices that stay at the higher level that I would consider to be inflation - anyone concur?
Perhaps the higher-seeming prices are signs that inflation is indeed affecting normal day-to-day goods now? Perhaps I've just been eating in unfamiliar cities.
Last edited by Jbhughes on Wed Feb 09, 2011 3:59 pm; edited 1 time in total |
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Jbhughes
Joined: 01 Jul 2010
Posts: 254
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| Posted: Wed Feb 09, 2011 3:57 pm Post subject: |
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Further Tet-related observation:
Most of the Tap Hoas (those small general stalls that sell a little of everything) I've stopped in for water etc around the provinces have responded neutrally or negatively when I've asked them if they're enjoying Tet.
A common response has been that it has been good but last year's was better. Why? Last year they sold more stuff. |
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