New changing policies make investors puzzled
Published: 27/04/2011 05:00
People now have to cudgel their brains about what they should do to protect their assets to cope with the changing policies on gold, dollar and Vietnam dong.
Many individuals are considering converting dollars into Vietnam dong and depositing dong at banks. Previously, keeping dollars were the top choice for them to protect their money. However, the people have to change their minds as the State Bank has told commercial banks not to pay more than three percent for dollar deposits. With the decision, depositors would get much higher interest rates if depositing in dong. A businessman has revealed that he has also converted dollars into Vietnam dong, because he said many banks are now offering very high interest rates for dong deposits, at 17 percent, even though the State Bank has set a cap of 14 percent on dong deposits. The businessman admitted that it would be risky for banks to mobilize capital at such a high interest rate. However, he believes that commercial banks will not go bankrupted, because the State Bank will not let this to happen. “Converting dollars into dong and depositing dong at banks proves to be the best way for now,” he said, adding that he has earned fat money thanks to the changes in the monetary policies applied by the State Bank. However, not everyone thinks this way. M, who has tens of thousands of dollars deposited at banks, said that she will withdraw the deposits when they become matured in some more days, because the dollar deposit interest rate has dropped to three percent, which is 11 percent lower than the dong interest rate and became less attractive. However, M said she will not sell the dollars for dong. If all people try to sell dollars for dong, the money supply will increase, because the State Bank will have to put more dong into circulation to purchase dollars. This will help raise the foreign currency reserves, but the inflation will increase, which will make the dong depreciate further. M said she will not keep dollars, or dong; but, she will purchase real estate – the land plots in the suburb areas of the city which are not too expensive, even though the real estate market is still frozen. As for many Vietnamese people, gold remains the safest “shelter” which can protect their assets in all cases. However, many people dare not buy gold at this moment because of the unclear policies. The government is considering applying measures to tighten the control over the gold market. Local newspapers once reported that the government would prohibit bullion gold trading. However, some days later, the newspapers quoted some state officials as saying that individuals would still be allowed to keep bullion gold, but they would have to sell gold at the authorized agencies. Nguyen Van Tam, a farmer in the Hau Giang province said that he and his wife plan use the money they have saved in the last many years to purchase gold. However, they still cannot make decisions, because the gold price goes up and down all the time. “Meanwhile, we do not feel safe when keeping dong, because the dong is depreciating steadily,” he complained. Tam Quang, another farmer in Can Tho City, said that the majority of farmers in the countryside still prefer keeping gold to any other kinds of assets. However, Quang said farmers dare not buy gold at this moment, because they do not know what the state’s policies will be. “We are still awaiting the State to clearly announce its policies, to make a decision on whether to buy gold,” Quang said. Do Hoa, Director of IME Company in HCM City, said “the monetary policies have been changing so regularly, thus making people feel insecure.” He said the policies should create more favorable conditions for enterprises and people to feel secure with their assets. If so, they will focus on doing business instead of spending time on looking for solutions to protect their assets, by converting their assets from these forms to other forms. Source: TBKTSG |
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