Reval This Weekend
I was told yesterday that with the signing of Article 8 that Article 4 is already done. I was told that there will be an economic meeting this Saturday and that they will move the rate to equal Tawian's and will move the dong up to around .01-.05 and will begin to float it up from there over time.
I want to add that I have recieved this same info from 8 different sources.
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Thread: Reval This Weekend
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20-04-2007, 04:53 PM #1
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Reval This Weekend
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20-04-2007, 04:56 PM #2
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I'm more confident of this hitting before the dinar.
Dollars unwanted, why?17:14' 05/01/2007 (GMT+7) VietNamNet Bridge – Commercial banks are still buying dollars from export companies, but just at moderate levels. Meanwhile, exporters are being advised to keep dollars in their accounts. What is happening?
Since mid December 2006, the VND/US$ exchange rates quoted by commercial banks have been lower than the inter-bank rates declared daily by the State Bank of Vietnam, a quite strange thing.
Why so strange?
In theory, the central bank acts as the final buyer and seller of foreign currencies to regulate the forex market. When supplies are abundant, the central bank has to buy dollars, and when supplies are short, it has to sell dollars, to keep the price stable.
Under the current regulations, commercial banks have to sell a part of dollars they hold if the volume exceeds the volume they are allowed to hold. Eximbank, for example, has the chartered capital of VND1,206bil, and it can hold the volume of foreign currencies of VND360bil, or $22mil (30% of chartered capital). If the total volume of dollars Eximbank buys in a day exceeds the $22mil threshold, the bank will have to sell the surplus sum to the central bank.
Nevertheless, the central bank has unexpectedly reduced the amount of dollars it has purchased in the last weeks. A source said that the central bank had been buying just 2mil dollars a day, and sometimes refusing to purchase from banks.
As a result, commercial banks have no other choice than reducing and even stopping buying dollars. If they buy all the dollars they are offered, their forex position would exceed the allowed level and they would be punished by the State Bank. Meanwhile, supplies of dollars are abundant: exports are high, which can bring large volumes of dollars, the sums of money sent by Viet Kieu to their relatives in Vietnam (overseas remittance) are also high, at $4.5-5bil. In addition, a big volume of dollars will be brought into Vietnam by the Viet Kieu returning home on Tet and foreign tourists.
A representative from an export company said that his company was now losing VND20-30 per dollar when it sold dollars to banks.
Banks are not buying dollars at this moment for fear that they will incur losses when the prices decrease. However, the VietcombankHCMCity branch is still trying to buy $10mil a day in order to help ease difficulties for enterprises.
Will VND revaluate?
Why is the state bank refusing to buy dollars? A trustworthy source said that the quota for putting VND into circulation for 2006 has run out. The General Statistics Office (GSO) said that the consumer price index (CPI) rose by 6.6% in 2006 and the central bank fulfilled its tasks of curbing the inflation.
Experts guess that the central bank will soon resume buying dollars as there will be the quota for putting VND into circulation for 2007. If so, the dollar excess will be resolved.
An official from the State Bank said that the bank must consider pluses and minuses, and especially the possible impact on prices when buying or selling dollars. “The central bank must not let the VND revaluate,” the official said.
However, the dollar is a kind of commodity and its price depends on supply and demand. When supplies are high, the commodity price must go down, and the VND will revaluate against the dollar.
A question has been raised about what the VND/US$ exchange rate should be to ensure the suitable inflation rate, the currency value stabilisation, the supply and demand balance, while creating liquidity to the market. At this moment, exporters are complaining that the high VND value makes Vietnamese goods less competitive in the international market, and the revaluation of the local currency should not be prolonged.Zubaidi:Monetary value of the Iraqi dinar must revert to the previous level, or at least to acceptable levels as it is in the Iraqi neighboring states.
Shabibi:The bank wants as a means to affect the economic and monetary policy by making the dinar a valuable and powerful.
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20-04-2007, 04:58 PM #3
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20-04-2007, 05:05 PM #4
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I have a ball with you Danny, but I must say that you are a big dork! So NEGATIVE about 95% of the items posted that are positive! Are you just being contrary? You can't possibly be this GLOOMY in person!
p.s...shouldn't you change your ID? Must've had a birthday or two...
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20-04-2007, 05:13 PM #5
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Revl the Dong?
Quote from Adster:
A question has been raised about what the VND/US$ exchange rate should be to ensure the suitable inflation rate, the currency value stabilisation, the supply and demand balance, while creating liquidity to the market. At this moment, exporters are complaining that the high VND value makes Vietnamese goods less competitive in the international market, and the revaluation of the local currency should not be prolonged.
Adster,
Does this imply that the value of the Dong at it's present day rate is too high? If so the reval would actually make the Dong less valuable against the dollar so that VN's goods would become less expensive to foreign buyers. Is that not so?
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20-04-2007, 05:16 PM #6
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20-04-2007, 05:18 PM #7
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20-04-2007, 05:19 PM #8
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The same problem as Iraq. Importing is costing far too much because the buying power is not there. By saying value they mean the value of 16121 to the dollar instead of for example if it was equivalent to 3 cents. They rely heavily on imports and exports for their economy and IMO this is one of the main reasons they are wanting to move on and revalue asap, and they will.
Basically they're currently vastly undervalued and losing out because of it.Zubaidi:Monetary value of the Iraqi dinar must revert to the previous level, or at least to acceptable levels as it is in the Iraqi neighboring states.
Shabibi:The bank wants as a means to affect the economic and monetary policy by making the dinar a valuable and powerful.
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20-04-2007, 05:38 PM #9
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Any chance of a lop on this one?
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20-04-2007, 05:46 PM #10
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