The demand for foreign currency loans for the year-end shopping season among enterprises has not risen much although the first month of the final quarter has passed.
The inter-bank exchange rate has been stable at VND20,828 per dollar since the year’s beginning. Prices of the greenback quoted at banks have increased slightly but have not reached the ceiling of VND21,036.
The foreign exchange market no longer witnesses constant fluctuations like before. Moreover, unlike previous years, the forex rate has not picked up in this fourth quarter.
Foreign currency credits in HCMC as of end-May had grown 1% over the end of 2011, but since June the growth has been negative. By the end of July, foreign currency credits had dropped 4.24% against end-2011.
The latest data of the central bank’s branch in HCMC show that foreign currency credit growth in the first ten months stands at minus 3.6%.
Nguyen Hoang Minh, deputy director of the central bank’s HCMC branch, said the city-based lenders would be able to address any increase in foreign currency demand. If necessary, the central bank could lend them a hand because its foreign reserves have risen by US$10 billion this year.
Nguyen Phuoc Thanh, general director of Vietcombank, remarked that in previous years, local enterprises often borrowed the U.S. dollar and then converted it into Vietnam dong to serve production. However, only exporters take out loans in foreign currency this year, and thus the demand is not as high as before.
Foreign currency supply at Vietcombank is sufficient, so the bank will give out loans to eligible clients. Foreign currency lending is now encouraged in a bid to stimulate credit growth, said Thanh.
Meanwhile, at Eximbank, credit growth remains negative, said general director Truong Van Phuoc.
He said the restriction on dollar loans had reduced the demand for the greenback. Moreover, in the current tough times, enterprises have cut down on import of goods and materials, so they no longer need loans in foreign currency.
“Unchanged exchange rate is the clearest proof of foreign currency supply-demand stability,” said the banker.
Pham Linh, deputy general director of OCB, said his bank had only received applications for foreign currency loans of some exporters. In addition, the demand to buy the U.S. dollar is very low.
“At this time in the previous years, auto and steel firms often sought foreign currency to import goods, but there is no signal for such a demand this year. Perhaps, in the current difficult situation, enterprises want to sell their goods in stock rather than importing new ones,” said Linh.
He said his bank had foreign currency supply available and thus would not need support from the central bank.
Vietcombank Securities Co. (VCBS) forecasts that the foreign exchange market will remain stable in the rest of 2012 and the central bank may make a small adjustment in forex rate as the U.S. dollar is slightly appreciating against other major currencies and because the central bank wants to boost competitiveness for export items.
The Saigon Times Daily