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Charvo
Joined: 02 Feb 2010
Posts: 37
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 Posted: Fri Feb 11, 2011 2:19 am Post subject: government devalued the VND |
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| I'm seeing 20890 as the sell rate at Vietcombank. This should impact anyone here who is getting paid at the official rate. It would effectively be a 7% raise. |
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H5N1
Joined: 15 Feb 2005
Posts: 80
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| Posted: Fri Feb 11, 2011 3:09 am Post subject: Re: government devalued the VND |
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| Charvo wrote: |
| I'm seeing 20890 as the sell rate at Vietcombank. This should impact anyone here who is getting paid at the official rate. It would effectively be a 7% raise. |
It can be considered a raise for a short time.
But it's not a good sign at all. I've noticed my favorite locals dishes, which are simple meals, go up 20-30% in one price hike.
Inflation is on the way. |
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Charvo
Joined: 02 Feb 2010
Posts: 37
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| Posted: Fri Feb 11, 2011 3:20 am Post subject: Re: government devalued the VND |
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| H5N1 wrote: |
| Charvo wrote: |
| I'm seeing 20890 as the sell rate at Vietcombank. This should impact anyone here who is getting paid at the official rate. It would effectively be a 7% raise. |
It can be considered a raise for a short time.
But it's not a good sign at all. I've noticed my favorite locals dishes, which are simple meals, go up 20-30% in one price hike.
Inflation is on the way. |
That's the one thing with VN retailers. They will jack up the prices quickly to match their inputs. They wouldn't be able to do that so fast in the USA. I can imagine how the average VN joe feels seeing food prices. I don't think it will ever get bad as it is in Egypt now, but I remember back in 2008 when people were hoarding rice in VN. There is always high discontent among the populace with high food prices. |
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just noel
Joined: 17 Jul 2006
Posts: 168
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| Posted: Fri Feb 11, 2011 5:25 am Post subject: Re: government devalued the VND |
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| Charvo wrote: |
| I can imagine how the average VN joe feels seeing food prices. I don't think it will ever get bad as it is in Egypt now, but I remember back in 2008 when people were hoarding rice in VN. There is always high discontent among the populace with high food prices. |
Yes, I remember the runs on rice back then. Hoards of people would rush into a co-op when it opened and buy literally, all of the rice off of the shelves. The shelves were bare.
With this current rise in food prices, there is one staple that has remained stable:
rice.
Why? Because it's a stable of hundreds of millions (1 billion) throughout Asia. The powers that be know this.
But other food (commodities) are rising, and yes it'll affect the working and lower classes and poor much, much more, as a higher percentage of their income goes to food. |
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Jbhughes
Joined: 01 Jul 2010
Posts: 254
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| Posted: Fri Feb 11, 2011 1:25 pm Post subject: |
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So the question on my mind is:
Buy or Sell (on the black market)? |
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UpScope
Joined: 31 Jul 2007
Posts: 82
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| Posted: Fri Feb 11, 2011 1:46 pm Post subject: |
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The other question....... how many students will forgo English classes at the schools where fees are pegged to the dollar?
These fees have just gone up 9.5% and for families struggling already, increased fees, increased food costs. Sounds horrible.
Increases across the board = less students = fewer classes = fewer teachers = more teachers looking for work = possible reduction in wages = unhappy labour force.
If there's an upside here, it isnt visible yet. |
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Vesuve
Joined: 18 Dec 2004
Posts: 28
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| Posted: Fri Feb 11, 2011 1:53 pm Post subject: |
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| Jbhughes wrote: |
So the question on my mind is:
Buy or Sell (on the black market)? |
Buy what, and sell what?
Honestly, why do anything? This is the fourth devaluation. I don't need nor want USD. I live in VN, am paid in VN, and pay for everything in VND. |
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Vesuve
Joined: 18 Dec 2004
Posts: 28
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| Posted: Fri Feb 11, 2011 2:01 pm Post subject: |
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| UpScope wrote: |
| The other question....... how many students will forgo English classes at the schools where fees are pegged to the dollar? |
And my school raised tuition recently before this latest devaluation for all new classes and notified our students with an announcement about it. They showed negative facial expressions.
For many students and their families it does cost a lot to study GE and TOEFL and IELTS. Add the hundreds of hours of study required for certain band scores, and the costs adds up realistically and more importantly, in the minds and pocket books of the students and their families.
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| These fees have just gone up 9.5% and for families struggling already, increased fees, increased food costs. Sounds horrible. |
My favorite My Kho local dish just went up thirty percent, today.
I just spoke with some parents tonight and they said the cost of a popular school's IELTS program was too expensive, so they chose a competiting schools that is 1/4 of a mile away.
The school they decided against is the one that just laid-off 10 teachers.
I think more families are shopping around.
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Increases across the board = less students = fewer classes = fewer teachers = more teachers looking for work = possible reduction in wages = unhappy labour force. |
Again, this describes the school that recently laid-off ten teachers.
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| If there's an upside here, it isnt visible yet. |
With 4 devaluations in the last year and a half, I don't see any upside (for us and many families) directly or indirectly related to these moves by the Central Bank. |
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Jbhughes
Joined: 01 Jul 2010
Posts: 254
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| Posted: Fri Feb 11, 2011 2:20 pm Post subject: |
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| Vesuve wrote: |
| Jbhughes wrote: |
So the question on my mind is:
Buy or Sell (on the black market)? |
Buy what, and sell what?
$US
I don't need nor want USD. I live in VN, am paid in VN, and pay for everything in VND.
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As does everyone else. There are several reasons why people may
want to trade between $US and VND of course.
Here's some I can think of:
1. Profit. - Are dollars cheaper than they might have been and might be in the future? - then buying them is a good idea. Are dollars more expensive than they might have been and might be in the future? - then selling them is a good idea.
2. VND is worthless outside of VN. People may not want to remain in VN for the entire rest of their lives. When they go on holiday/leave/for newer pastures/visit home they will need dollars.
3. Things are looking rather negative at the moment, as you yourself have highlighted well. People may want to have some dollars as an emergency fund.
4. People like you who have no need for dollars whatsoever may want to sell any dollars they have for VND.
I suppose you may be pointing out that $US are no more special than any other foreign currency or perhaps other currencies may be more profitable/safer than $US. Should this be the case, then substitute your favourite foreign currency for $US in the above paragraphs. |
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Vesuve
Joined: 18 Dec 2004
Posts: 28
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| Posted: Fri Feb 11, 2011 3:12 pm Post subject: |
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Jbhughes,
I not mean to sound flippant. If I did, apologies.
I certainly understand those wanting to hold other currencies, and I have a small amount of USD as that's the currency I need when traveling outside of VN or to my home-country.
I was responding (and perhaps mistakenly assuming) to your query thinking you would be wanting to do arbitrage. That's legal, and certainly up to you.
And I agree that if someone has sizable amounts of VND in their VND bank accounts from teaching over an extended period of time, then diversifying would be fine.
We can also wire a portion or all of our savings account into our home-country's savings account.
Where I'm from (US) the banks are paying 1% in interest.
I'll keep my dough in my VND account here.
Cheers. |
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Mushroom Druid
Joined: 19 Oct 2009
Posts: 91
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| Posted: Sat Feb 12, 2011 5:17 am Post subject: |
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Inflation is already high, and may go higher. No gloom and doom, just observation and speculation.
From The Nation.
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WATCHDOG
Devaluation of the dong puts pressure on Thai exporters
By Nophakhun Limsamarnphun
Running counter to the regional trend of monetary policy tightening to curb inflation and strengthening currencies, Vietnam this week decided to devalue the dong for the fourth time in 15 months.
The official exchange rate is now about 20,800 dong per dollar, up 7 per cent from the previous 19,400 dong. Yet, the dong is weaker on the black market, trading at around 21,300 dong per dollar, reflecting a lack of confidence despite the latest official devaluation.
On one hand the devaluation makes Vietnam's exports cheaper in the international market. This will hurt Thai exports as some Thai and Vietnamese products are similar - such as rice and certain low-end manufactured goods. On the other hand, the devaluation will worsen inflation, which has long been a significant issue as far as Vietnam's economic stability is concerned.
By further devaluaing the dong, Vietnam risks runaway inflation, especially amid the rising global inflationary pressures caused by the dollar's weakness and commodity speculation.
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Source - http://www.nationmultimedia.com/ |
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Charvo
Joined: 02 Feb 2010
Posts: 37
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| Posted: Sat Feb 12, 2011 6:38 am Post subject: |
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| Mushroom Druid wrote: |
Inflation is already high, and may go higher. No gloom and doom, just observation and speculation.
From The Nation.
| Quote: |
WATCHDOG
Devaluation of the dong puts pressure on Thai exporters
By Nophakhun Limsamarnphun
Running counter to the regional trend of monetary policy tightening to curb inflation and strengthening currencies, Vietnam this week decided to devalue the dong for the fourth time in 15 months.
The official exchange rate is now about 20,800 dong per dollar, up 7 per cent from the previous 19,400 dong. Yet, the dong is weaker on the black market, trading at around 21,300 dong per dollar, reflecting a lack of confidence despite the latest official devaluation.
On one hand the devaluation makes Vietnam's exports cheaper in the international market. This will hurt Thai exports as some Thai and Vietnamese products are similar - such as rice and certain low-end manufactured goods. On the other hand, the devaluation will worsen inflation, which has long been a significant issue as far as Vietnam's economic stability is concerned.
By further devaluaing the dong, Vietnam risks runaway inflation, especially amid the rising global inflationary pressures caused by the dollar's weakness and commodity speculation.
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Source - http://www.nationmultimedia.com/ |
This devaluation is going to affect primarily the essential goods imported into the country like petrol. I think petrol will be increased next month because it is way underpriced relative to world prices. Then, electricity prices will be increased the following month. The government is trying to stagger these moves in order to blunt the effects. VN is going to hit some bumps in the road. |
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Jbhughes
Joined: 01 Jul 2010
Posts: 254
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| Posted: Sun Feb 13, 2011 10:05 am Post subject: |
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| Vesuve wrote: |
Jbhughes,
I not mean to sound flippant. If I did, apologies.
..........
I was responding (and perhaps mistakenly assuming) to your query thinking you would be wanting to do arbitrage. That's legal, and certainly up to you.
..........
Where I'm from (US) the banks are paying 1% in interest.
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No, no - you didn't come across flippant, I just couldn't quite grasp you're point and figured my original one sentence post may have not been particularly explanatory. I hope my subsequent post didn't appear facetious.
.....
And actually yes, I'm not considering arbitrage - I perhaps should have joined in with the techcombank customers when I went to Cambodia, but it's too late for that.
I'm really just considering what effect the official price change has had on the real (black market) price and whether anyone with some currency-related wisdom can offer up some advice/argument as to whether now is a good time to buy or sell dollars or not.
.....
Honestly, I haven't even considered interest rates, something I probably should do!! |
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