However, Vu Tien Dung, Chairman of Hoang Vu Trade Company, said that the current dollar price increases are ‘acceptable’ compared with the dollar price increases in June and July, when the price soared to VND19,000/US$1.

 

According to Dung, importers want the exchange rates to be as low as possible. However, Dung said that the current exchange rate proves to be reasonable, as this can harmonise the benefits of importers and exporters. Dung said that his company also has products for export; therefore, he does not want to see the exchange rates decrease too sharply.

 

Vu Vinh Phu, Chairman of the Hanoi Supermart Association, also said that the VND17,500/US$1 threshold, which was made after the State Bank of Vietnam widened the forex trading band to +/-3%, proves to be not worrying for most import companies. As the dollar supply remains profuse, commercial banks have committed to sell dollars at below VND17,000/US$1.

 

However, Phu said that the importers of food, vegetable, and consumer products will face difficulties due to the dollar’s revaluation. For example, 50% of materials for local confectionary production are imports. Therefore, when the VND/US$ exchange rate goes up, production costs will increase. 

 

Experts have reassured importers that dollar prices will not increase too sharply.

 

Le Dang Doanh, a senior economist, said that the dollar is now in excess so the dollar price will not increase sharply even when the demand for dollars to make payments increases towards the year’s end and Lunar New Year (Tet).

 

Phu said that the VND/US$ exchange rate is still ‘within the control of businesses’, but state management agencies should consider thoroughly which products Vietnam needs to limit the import of, which imports need to be encouraged, in order to ensure enough products for Tet sales.

 

For example, import frozen chicken will be helpful in balancing supply and demand if winter epidemics occur in poultry.

 

“The prices of vegetables have risen by 30-50% since the historic flood; therefore, imports will help balance supply and demand,” Phu said.

 

He added that the purchasing power on Tet is expected to drop by 10% over the previous year, not to increase by 15-20% as previously predicted.