Job Discussion Forums

[TimkinMS]

[haller_79]

It is accurate and will continue to be so for a long time. The GFC brought down prices at the higher end of the market but at the lower end little has changed.

[sigmoid]

Financial Crisis a la Thailand 1997 on the way?

Insight: Hard lessons for Vietnam as property slumps

http://www.reuters.com/article/2011/09/23/us-vietnam-property-idUSTRE78M10H20110923

Some excerpts:

[TimkinMS]

The black market spread is happening again.

Not good news.

Here is an excerpt from an informative economic site:

[Jbhughes]

Ok, so I'm in the market for shifting some money into $US /(� or �) before the next gvmnt devaluation. This will probably have to be done on the black market.

So, 2 questions -

1. What is your prediction for the timing of next gvmnt devaluation?

and

2. In the time leading up to that point, when will the black market $ /(� or �) be at its cheapest?

Thanks

[LettersAthruZ]

[spycatcher reincarnated]

I was quoted a rate of 21,300 to buy usd on the black market yesterday.

My take on this is as follows:

It is expected that the VND will devalue against the usd sometime within the next few months.

When there is a large variance between the black market rate and the bank rate it is often difficult to buy usd from the banks.

If the banks are selling at the bank rate then I think it would be worth buying usd, especially as if this variance continues then you may not be able to legally buy them, if you want them, until the variance reduces.

Before Tet- November onwards- importers needs to purchase a lot of USD, so for the last few years at least we have seen the vnd/usd exchange rate come under pressure during the November to March period. I don't see any reason why it would be different this year.

[Belgrove]

Thanks for the tip-off spycatcher, I'm paying $5000 next week so I'll take it out of my high interest VND account, pay VND equivalent and hold onto my dollars in the meantime.
21300 to the dollar is 2.4%. That's more than my average 1.6% per month at the minute.

That's $40 I can use elsewhere!

Thanks again

[spycatcher reincarnated]

Hmmm.....

I think it is difficult to get above 14% annual interest on vnd at a more credible bank at the moment.

The rate I quoted was to buy usd, not too sell them. Think the spread was about 50 vnd.

If you have legally earned the money I would be careful about taking it out of the banking system just for a quick buck. I feel it would be unlikely that you could put it back in the banking system as having a proof of source and thus would not be eligible to be transferred abroad. If you have no need to transfer that money abroad, then the transaction may well be worth doing.

My comment was really to say that if people who had vnd savings wanted/needed to transfer money abroad soon and if the bank is willing to convert at the official bank rate, then I feel now would be a good time to make that transaction.

[Belgrove]

Not to worry, it's not to make a quick buck.

A bill needs settled, I'll settle in VND. I could settle either way, VND or USD.

I will still have VND in the high interest account.

I'll be watching the market for a month until my next deposit day. If the black market remains high I'll exchange there before depositing my usual monthly amount. The 50VND spread still gives 450VND to the dollar over the bank rate. I'm going by your figures, I haven't physically checked yet.

I'm only playing little money games with the little I have to see how the ball rolls. I guess I'm just being petty and money-pinching, but it's just a bit of fun.

Oh, and I don't need to send money abroad.

Thanks again.

[kurtz]

Sorry for not reading the 7 pages but here are my questions.

Is it better to convert dong into US using a joint bank account like HSBC which allows you have either your money in dong or USD

or

Have it in dong in a VN bank account, some of which are offering a high % with the ultimate goal of selling the dong and buying USD or sending it abroad?

Also, is it silly converting from dong to USD and then having to buy a 3rd currency which I intend to do

I have no immediate need to send money to my home country, but in the long run that is what I aim to do.

[generalgiap]

One can open a USD and/or a Vietnamese Dong account at any bank in Vietnam. HSBC, Standard Charterand A&Z bank are not joint ventures but are localised banks that have little or nothing to do with their banks outside of Vietnam. They must abide by all of the banking regulations in Vietnam.
Further, they have the same guarantees regarding deposits, long-term deposits etc as the Viet banks. The guarantee is 50 million dong, unlike the USA where I think the deposits FDICis 200,000 or 250,000 usd. Therefore, if you have more than 50 million dong in Dong or USD in a bank in vietnam you have lost it if the bank goes out of business. However, I can't imagine that these banks including Vietcom bank will go out of business.

Regarding interest rates, the max for long term deposits is 14%, and the govt is cracking down on banks that give more than 14% and cash/gold etc to convince customers to deposit currencies. In fact, quite recently, DongA bank was found giving higher interest rates and they were fined, cant open any new branches or ATM machines for one year.

The banks are now abiding by this regulation, and most are offering 14% on savings accounts incuding the foreign banks which have been localised.
Of coursethe differece between the long-term deposits and the saving accounts is that the interest rates can change for the savings accounts at any time but you can withdraw your money at any time and still get the interest. If you withdraw your money from long term deposit before it finishes, you get no interest.

Regarding converting your dong into another currency, convert it directly to the currency you want because there is a fee every time you convert.
Furtermore, the issue regarding obtaining foreign currency is a problem regarding USD only. This is a fact, the black market rates is generally an issue concerning USD only not Euros or British pounds but it depends on the time of year etc. I have had a problem two times converting Dong to usd and transferring outside of Vietnam because of the big difference between the blackmarket dong/usd rates. But the banks will have no problem converting it to another currency besides usd. Also when there is a big difference on black market usd dong, this is not the same for euros or pounds, very little difference, this is based on years of experience. Also according to the Banking regulations in Vietnam, if you are a foreigner working in Vietnam and have all the proper docs tax etc, they must convert to a foreign currency and transfer, but the bank can choose the currency. I know this because it happend to me one time and they showed me the offical doc.

Therefore, it is best for you to keep it in a savings account at 14%, HSBC, Standard chartered etc and convert to the currency of your choice, and if you dont need usd can transfer with another currency at the official exchage rate at any time during the year you can change on black market if you dont have proper docs and not lose much if you dont need usd.

[generalgiap]

One can open a USD and/or a Vietnamese Dong account at any bank in Vietnam. HSBC, Standard Charterand A&Z bank are not joint ventures but are localised banks that have little or nothing to do with their banks outside of Vietnam. They must abide by all of the banking regulations in Vietnam.
Further, they have the same guarantees regarding deposits, long-term deposits etc as the Viet banks. The guarantee is 50 million dong, unlike the USA where I think the deposits FDICis 200,000 or 250,000 usd. Therefore, if you have more than 50 million dong in Dong or USD in a bank in vietnam you have lost it if the bank goes out of business. However, I can't imagine that these banks including Vietcom bank will go out of business.

Regarding interest rates, the max for long term deposits is 14%, and the govt is cracking down on banks that give more than 14% and cash/gold etc to convince customers to deposit currencies. In fact, quite recently, DongA bank was found giving higher interest rates and they were fined, cant open any new branches or ATM machines for one year.

The banks are now abiding by this regulation, and most are offering 14% on savings accounts incuding the foreign banks which have been localised.
Of coursethe differece between the long-term deposits and the saving accounts is that the interest rates can change for the savings accounts at any time but you can withdraw your money at any time and still get the interest. If you withdraw your money from long term deposit before it finishes, you get no interest.

Regarding converting your dong into another currency, convert it directly to the currency you want because there is a fee every time you convert.
Furtermore, the issue regarding obtaining foreign currency is a problem regarding USD only. This is a fact, the black market rates is generally an issue concerning USD only not Euros or British pounds but it depends on the time of year etc. I have had a problem two times converting Dong to usd and transferring outside of Vietnam because of the big difference between the blackmarket dong/usd rates. But the banks will have no problem converting it to another currency besides usd. Also when there is a big difference on black market usd dong, this is not the same for euros or pounds, very little difference, this is based on years of experience. Also according to the Banking regulations in Vietnam, if you are a foreigner working in Vietnam and have all the proper docs tax etc, they must convert to a foreign currency and transfer, but the bank can choose the currency. I know this because it happend to me one time and they showed me the offical doc.

Therefore, it is best for you to keep it in a savings account at 14%, HSBC, Standard chartered etc and convert to the currency of your choice, and if you dont need usd you can change on black market if you dont have proper docs.

[chim35]

Generalgiap, are you saying you can buy foreign currencies like Euro, Aus $ or Canada $ from the banks with no problem and at official bank rates?

Or you can buy them at the gold shop and then deposit them at the bank?

To transfer them out of the country, first you have to have them in a bank account. Which banks offer accounts denominated in Euro, AUD and CAD and would they let you deposit gold shop money there?

And you would need to have an account in your foreign country that also was denominated in that currency in order to transfer them, wouldn't you?

I think that the buy/sell spreads for currencies other than the USD are rather large in VN and that it is therefore not such a good buy. What do you think?

Also, if you already have a USD bank account in VN, are you allowed to transfer your USD to a USD bank account in your home country easily, or do you have to prove the source with lots of documentation?

[generalgiap]

Clarifications:

There are only two currency accounts available in Vietnam, USD and Viet Dong. In addition, in some countries, there is only one currency account, such as USA. I dont think it is possible to have a Euro/pound account in the USA. I suspect that in England, there is only one account British Pounds. This is probably the case for most countries with currencies traded on the international market.



Generalgiap, are you saying you can buy foreign currencies like Euro, Aus $ or Canada $ from the banks with no problem and at official bank rates?





No, I am not. If you have proper documentation that you have paid taxes one can convert into another currency and transfer out of the country. One can choose the currency, this must be transferred out of Vietnam.
So for example, if you want USD, you must transfer the usd out of the country, the banks will not allow you to convert to USD and deposit into your USD account in Vietnam. Which currency do most people choose, it depends on where they are transferring the currency. For example, if you are transferring the money to England, one would transfer British Pounds not USD, if you have to pay a payment in Honk Kong, one will transfer HK Dollars. If you are an Australian, and you want to change your dong into another currency to transfer to Australia, one would transfer AUD. etc etc
This is due to an extra fee for converting the currency, such as GB into USD if you are transferring to USA same with other countries because one doesn't have numerous accounts in different currencies. For example, the Bank last year forced me to transfer either British Pounds or Euros to my account in the USA because it was at a time when there was a lack of USD and there was a large difference between the official rate and black market. I transferred Euros to the US and my bank in the US converted the Euros to USD and deposited in my account. Also the banks can decide which currency, but this is only an issue with USD and depends on black market/official rates.

According to the banking regulations, banks are not required to change any Vietnamese dong into another currency and give you that currency in cash in Vietnam. So one hears of teachers travelling on holidays outside of Vietnam and not being able to get USD in hand. Or a small amount, less than 1000 usd, sometimes only 100 usd etc. This depends on the bank and
your relationship with the bank. I generally havent had a problem because I have a lot of money in long term deposits etc. The best way around this is to transfer out and have a debit card from your bank abroad.



Or you can buy them at the gold shop and then deposit them at the bank?





You cannot deposit other currencies besides USD or Viet Dong because there are no currency accounts for those currencies. According to Vietnam law, you can bring in USD7,000 or equivalent, this may have changed recently to 5000USD. So if you have USD and take it to the bank with your passport, and you have evidence-entry stamp, I think it must be within two weeks of entering the country, you can deposit up to 7000USD into your USD account or change to Viet Dong and deposit in Dong account. But you can't transfer that money out of Vietnam. You can also deposit up to 200 million VND every time you enter Vietnam. I dont know why 200 million Viet Dong because it is more than 7000usd. I do it all the time.
This money is considered non-source and cant be transferred out of Vietnam but you can put it in long-term deposits. What if you had 7000 USD in Euros and want to deposit it, well of course you can't deposit the Euros because there is no such account. I suspect the bank would do the following, they would probably try to force you to change to dong, but they may possibly change to USD depending on the official and black market rates. However, I think one would have to change into Viet Dong not USD because the govt is trying to control the USD black market etc. Also, once they change to USD it goes into your USD account and you can withdraw the USD and sell them on the black market for a profit.

You must prove the source for any money to be transferred out of Vietnam. The documentation is generally a tax doc from your company that PIT has been paid, employment contract. But, if you have your salary transferred to your account and the bank knows you, they dont ask for the tax doc. At some stage you will need your employment contract, but they will photocopy and keep it on file.

When there is a big difference between the USD official rates and black market such as right before the lunar new year, the other currencies have a less margin between the two-I know this because I have been forced to buy during this period. One also needs to be careful about what hard currencies you are bringing into your home country because many banks will not change large amounts of another currency into the currency of that country, even if its a deposit. This is not the same when discussing bank to bank paper transfers.