Commercial banks have seen substantial improvement in dollar liquidity since the central bank hiked the inter-bank rate on December 25, but the foreign currency is still in short supply as exporters are still hesitant to sell their foreign earnings to banks.

The head of a transaction office of Bank for Investment and Development of Vietnam (BIDV) said that although the incoming dollar resource has improved, exporters still cling to their dollar funds as safe assets. “Exporters do not want to sell all of their dollars to banks, but just part of their holdings when they need funds in Vietnam dong,” he said, adding the main source of dollars at this time was from the State Bank of Vietnam.

“Before December 25, enterprises wanting to buy dollars at my office had to wait for up to one week, but the time is now reduced to two or three days. The situation is improved but demand is still higher than supply,” said the source.

Similarly, a banker from a small joint-stock lender said that the dollar was still in short supply, and “the easiest signal is that almost all banks quoted their selling prices at the ceiling permitted by the central bank, or 3% higher than the inter-bank rate.”

In addition, prices on the unofficial market are still higher than at banks, proving supply and demand on the U.S. dollar are not balanced although the situation is better than in December, he noted.

On December 25, the inter-bank rate increased by 3% to VND16,989. The central bank in the following days has reduced the inter-bank rate gradually so commercial banks have decreased their selling prices too, but their buying prices have remained unchanged.

At Vietnam Export Import Commercial Bank, or Eximbank, the dollar price purchased via accounts has been unchanged at VND17,430 per dollar from December 30 last year while its selling prices have gradually decreased from VND17,489 to VND17,480 on Tuesday as the inter-bank rate has been lower. (SGT)