US dollar hits new high versus Vietnam dong

The U.S. dollar has continued to strengthen against the Vietnamese dong, reaching a new high at commercial banks and causing another headache for the country’s central bank, which has been ordered to stem gold fever.

The State Bank of Vietnam (SBV) on Tuesday raised its mid-point USD/VND exchange rate by VND45 from Monday to VND24,141 a dollar. Since the start of this month, the rate has risen VND137, or 0.57%.

With a trading band of ±5%, the greenback is capped at VND25,348 at commercial banks.

State-controlled Vietcombank, allegedly the largest forex trader in the country, quoted the greenback at VND24,978-25,348 for bids and asks on Tuesday morning, up VND48 for on both sides from a day earlier.

Privately-run Eximbank offered the dollar at VND24,940-25,340, up VND10. Similarly, Techcombank was fixing the rate at VND25,077-25,348, up VND70-48 from late Monday.

Since the start of this year, the U.S. dollar has increased around 3.3% on the interbank market.

The price of the dollar also went up on the unofficial market, being offered at VND25,470-25,600, up VND20-50 from Monday.

The U.S. Dollar Index (DXY) is trading at 106.37, up 0.15%. The index has risen 2.7% over the past month and 4.97% year to date, according to MarketWatch data.

Meanwhile, the SBV is preparing to resume gold bar auctions for the first time in 11 years to increase supply and narrow the disparity between domestic and global prices.

Up to 15 companies and banks have expressed interest in participating in the auctions.

State-owned Saigon Gems and Gold Company on Tuesday morning raised its selling prices of SJC-branded gold bullion by VND200,000 ($8) to VND84.3 million ($3,372) a tael, while it was buying the metal for VND82.3 million a tael.

Gold prices in Vietnam are now VND11.45 million ($458) higher than global rates.

The SBV is expected to sell gold from its reserves and withdraw cash through auctions, thus reducing liquidity in the banking system. This, in exchange, aims to ease pressure on the USD/VND rate.