Hanoi black dollar market goes underground
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The “foreign currency market” on Hanoi’s Ha Trung Street has closed due to the State Bank’s tightened control on free foreign currency trading. Secret, “behind the door” trading, however, still goes on on many other streets.
On certain streets such as Dinh Le, Nguyen Xi and Dinh Tien Hoang in Hoan Kiem District, not many dollar dealers sit to wait for customers as they did before the lunar new year. Their modus operandi has changed -- food and drink sellers now act as brokers between the buyers and the sellers.
Dollar transactions are now conducted prudently and secretly. Asked to sell US$2,000 on Wednesday afternoon (March 17), a beverage shop owner on Nguyen Xi Street looked us up and down for a while before asking a relation at another location to bring her the money.
“The police are so strict these days, we seldom keep the dollars with us,” said the woman. “If we find a client with a true demand, we ask our relations to bring us the dollars.” She sold a dollar for VND21,700. Asked for a price cut, she said, “It’s the same wherever you buy. This is the fixed rate.”
At a jewelry shop at 105 Ma May Street, the shop owner kept phoning her “agents” to ask about the prices of dollars and euros. Transactions between the seller and buyers took place quickly -- one dollar sold for VND21,500. Hearing a customer’s bargain, she usually frowned and said sharply, “How much can you get with a bargain? There’s no other price.”
When foreign exchange points on Ha Trung and Tran Nhan Tong streets came close to ceasing all operations during the strict inspections of the State Bank and police, especially after a US$400,000 illegal deal was caught red-handed, new exchange points, including jewelry shops, emerged spontaneously on Dinh Le, Nguyen Xi, Dinh Tien Hoang, Ma May, Hang Bac and Luong Ngoc Quyen streets. At Phu Van Jewelry Shop, at 25 Luong Ngoc Quyen Street, the money counter and the computer ran non-stop. This shop sold dollars for VND21,400 each and bought them each at VND20,800.
To avoid being caught by inspectors, many shops maintain a legal front business, trading in gold, silver and jewels while secretly transacting foreign currencies, especially U.S. dollars. They could sell as many dollars and euros as their clients wanted to buy. Different shops used different selling and buying rates, buying dollars at VND19,800-20,400 each and selling dollars at the rate of VND21,700-22,000.
Restricted sale from banks
It is still “very difficult” for people to purchase dollars at banks even though the State Bank has requested credit organizations with licensed foreign exchange transactions to meet people’s legal demand for foreign currencies.
Thu Huyen, who lives on Giai Phong Street, said she wanted to send money to her brother, a student in Singapore, but could hardly buy dollars. Shops on Ha Trung Street refused to sell and recommended banks to her but she could not get the banks to exchange dolars for her even after she produced many kinds of related papers.
For Nguyen Ba Hung, who lives on Hai Ba Trung Street, he has been unable to buy dollars from banks during the past few days to pay for a US$5,000 debt he borrowed from a friend to buy a house. He tried to convince his friend to take the Vietnamese currency at the exchange rate of VND22,000/US$1 but his friend just wanted to keep it in dollars for fear that he would not be able to buy them when necessary.
A representative of a bank on Hue Street says the bank only sells dollars to individuals that hold relevant papers. “It’s not that our bank lacks foreign currencies but we have to keep them as a priority for companies that import and export essential goods and for our regular clients,” he said.
