Vietnam Devalues Currency By 7% ,Black Market More

[THAIPHUKET]

Bloomberg= http://goo.gl/KuEE6

minus 7% is substantial, apparently in the black market even more.

How black is that market, what are the risks for a farang?

How to make use of it?

Time to vacation ?? Or opportunity for which bigger ideas?

Edited February 11, 2011 by THAIPHUKET

[Wrong Turn]

minus 7% is substantial, apparently in the black market even more.

I'll go to the black market today and post what price I get quoted.

How black is that market, what are the risks for a farang?

How to make use of it?

The "black market" operates in the gold shops, mainly. Most of these shops are very organized, and efficient. I've used them when I travel outside of Vietnam and need US dollars. There has been a spread between the "black market" and the official bank rate for about 3 months now. Last year there was a spread also that lasted for a couple of months.

You cannot, under any circumstances, buy US Dollars from any bank right now. I tried to buy USD from my ANZ bank where I had an account and the answer was "no," even with a plane ticket stating I was leaving the country.

This spread is causing many local to buy US Dollars from the black market and hoard them, think the value will appreciate by keeping them hidden under the mattress (locked into a safe) at home.

This is also the 4th devaluation of the VND currency in the last 1 1/2 or so.

Time to vacation ?? Or opportunity for which bigger ideas?

I'm not sure. Yes, you're getting more Dong for the currency you have.

[LaoPo]

..that's the 4th (!) devaluation in just 15 months.

LaoPo

[Wrong Turn]

I just returned from one of the more known and popular Gold Shops (translation: money exchange center/black market):

I was quoted 1 USD = 21,470

[rak sa_ngop]

I was in Saigon just before Xmas, and found that the exchange shops around Don Khoi and Nguyen Hue streets offered really good rates with narrow spreads. I originally got 700 dong to the baht, but when I went to change a load of VN Dong back to baht (about 40,000 bht) I only had to pay 720 VN dong for 1 baht. Meanwhile the banks were offering a buy/sell spread of 650/750 to the baht. (One change shop on Pham Nu Lao was as low as 600 baht!)

There also seemed no shortage of dollars then judging by the large wad of 100 USD dollar bills I saw one guy walking off with.

[THAIPHUKET]

Does that mean it's better to arrive with $ cash not traveler checks?

Cash dong are accepted everywhere incl big hotels?

[PattayaParent]

There's a constant cycle of :- increase in gold price, so the black market are able to offer more Dong for the $, the government lose out so they devalue to bring the rates closer (and benefit the export economy), gold price stabilises so parity is maintained, increase in gold price etc. etc.

You can open a US$ account in the banks (interest rate 4.8%) so you'll have no problems getting $ when you want and no need to keep them under a matress.

Edit: @ THAIHUKET - Dong is accepted anywhere in Viet Nam, it's their local currency.

Edited February 11, 2011 by PattayaParent

[rak sa_ngop]

Does that mean it's better to arrive with $ cash not traveler checks?

Cash dong are accepted everywhere incl big hotels?

I think this depends where you are coming from. Based on my experience there is no problem exchanging baht for dong outside the banks in Saigon (black market, but maybe gold shop market is a better expression) and getting a good rate. So if you are coming from Thailand there seems no point in changing baht to dollars first if you are staying in Saigon. Outside Saigon I do not know.

Travellers checks are good for security, but maybe using ATMs to draw overseas money is a better way. There are numerous ATMs in Saigon but not sure if they allow overseas withdrawals. Best check this out first.

[rak sa_ngop]

Does that mean it's better to arrive with $ cash not traveler checks?

Cash dong are accepted everywhere incl big hotels?

Hotel rates are usually quoted in dollars for the tourist trade (easier to write 100 USD than 2,000,000 dong). However they all will accept VN dong, usually, but not always at the official bank exchange rate.

[THAIPHUKET]

Correct assumption, I am from CM therefore the THB hint is helpful indeed.

Off the topic,

I am hampered in my walking ability. What I 've been hearing about traffic, crossing roads plus no idea if sidewalks are any different from Thailand leads to the basic question= is Vietnam worth a visit or too much stress?

[Naam]

I just returned from one of the more known and popular Gold Shops (translation: money exchange center/black market):

I was quoted 1 USD = 21,470

that's less than 4%. back in the 90s it used to be 10-12%.

[Wrong Turn]

I just returned from one of the more known and popular Gold Shops (translation: money exchange center/black market):

I was quoted 1 USD = 21,470

that's less than 4%. back in the 90s it used to be 10-12%.

Now the spread is less than 4% (you note)

Before this recent devaluation (of the bank rate) the spread was averaging 8-10%.

[PattayaParent]

Correct assumption, I am from CM therefore the THB hint is helpful indeed.

Off the topic,

I am hampered in my walking ability. What I 've been hearing about traffic, crossing roads plus no idea if sidewalks are any different from Thailand leads to the basic question= is Vietnam worth a visit or too much stress?

Pavements are usually good but full of parked motocy so you sometimes have to walk on the road.

Slow and steady is best crossing roads, traffic doesn't move as fast or as aggressively as in Thailand

[jobsworth]

I have heard that there may be another associated problem in all this.

The Vietnamese are crossing into Cambodia where they can get a better exchange rate using VISA cards.

VISA has retaliated by restricting the number of VISA withdrawals per person per week.

This can affect foreign tourists in Cambodia.

[samjaidee]

Does that mean it's better to arrive with $ cash not traveler checks?

Cash dong are accepted everywhere incl big hotels?

I live in HCMC. Yes, bring US$ cash not traveler's checks.

In my experience everywhere in HCMC takes payment in Dong. Your bill in a top end hotel maybe in US$ but they will accept Dong.

I get paid in US$ cash. It would never occur to me to convert my salary into Dong at a bank. I always use a gold shop and get +/- 10% more than at a bank.

[samjaidee]

Does that mean it's better to arrive with $ cash not traveler checks?

Cash dong are accepted everywhere incl big hotels?

I think this depends where you are coming from. Based on my experience there is no problem exchanging baht for dong outside the banks in Saigon (black market, but maybe gold shop market is a better expression) and getting a good rate. So if you are coming from Thailand there seems no point in changing baht to dollars first if you are staying in Saigon. Outside Saigon I do not know.

Travellers checks are good for security, but maybe using ATMs to draw overseas money is a better way. There are numerous ATMs in Saigon but not sure if they allow overseas withdrawals. Best check this out first.

Yes, they all allow overseas withdrawals. Money is paid out in Dong.

[Wrong Turn]

I have heard that there may be another associated problem in all this.

The Vietnamese are crossing into Cambodia where they can get a better exchange rate using VISA cards.

VISA has retaliated by restricting the number of VISA withdrawals per person per week.

This can affect foreign tourists in Cambodia.

This occurred only with the use of 1 banck. Techcom bank.

For some reason this bank had low fees at the ATM machine. VNese would withdraw money out of the ATM in USD, then go to the black market in Phnom Penh and buy Dong.

They cleaned out millions, yes millions from the Techcom banks in PP.

[PattayaParent]

<br />

<br />I have heard that there may be another associated problem in all this.<br />The Vietnamese are crossing into Cambodia where they can get a better exchange rate using VISA cards.<br />VISA has retaliated by restricting the number of VISA withdrawals per person per week.<br />This can affect foreign tourists in Cambodia.<br />

<br /><br />This occurred only with the use of 1 banck. Techcom bank. <br /><br />For some reason this bank had low fees at the ATM machine. VNese would withdraw money out of the ATM in USD, then go to the black market in Phnom Penh and buy Dong.<br /><br />They cleaned out millions, yes millions from the Techcom banks in PP.<br />

<br /><br /><br />

I guess you mean billions, or even trillions or zillions? as 1 million Dong is only $50.

Edit: Which Techcom Bank branch dispenses US$?

Edited February 15, 2011 by PattayaParent

[Wrong Turn]

^ Pattaya Parent, here is the article.

--

Money for nothing

Thursday, 27 January 2011

James O’Toole and May Kunmakara

A money changer holds up US dollars and Vietnamese dong at Central Market in Phnom Penh yesterday.

Several weeks ago, staff at ANZ Royal Bank noticed a peculiar customer at one of their ATMs in Phnom Penh.

With a male companion looking on behind her, the woman inserted a card issued by Vietnam’s Techcombank and withdrew the maximum allowable amount of cash, US$2,000.

Then, taking out a new Techcombank card for each transaction, she repeated the task 11 times in succession.

The woman is one of a growing number of Vietnamese nationals who bankers say have been cleaning out the Kingdom’s ATMs, taking advantage of the unusually large gap between Vietnam’s official and unofficial exchange rates to earn thousands of dollars in profits.

ANZ CEO Stephen Higgins said yesterday that Techcombank cardholders had withdrawn roughly $12 million in cash from his bank’s ATMs since mid-December, with the bulk coming in the past two weeks.

They took roughly $5 million from ACLEDA Bank machines from the beginning of the month until yesterday, ACLEDA Executive Vice President So Phonnary said.

All told, Techcombank users have withdrawn “at least $20 million” in cash from Cambodian ATMs in the past few weeks in a scheme that has also stretched to Singapore and China, Higgins said.

“It’s very smart what they’re doing,” he said.

“It’s one of those things where one person figures out this is an easy way to make money, tells a few people who tell a few more people, and suddenly you get busloads of people coming across the border to try and do it.”

The Vietnamese government has pegged the country’s official exchange rate at roughly 19,500 dong to the dollar, though the black market rate – also used legally by money changers in Cambodia – is closer to 21,000 dong to the dollar, a difference of about 8 percent.

The Vietnamese who have been travelling to the Kingdom have taken advantage of this.

At Cambodian ATMs, they receive US dollars that have been converted from the dong in their home accounts at the official exchange rate.

They can then trade these dollars for dong from Cambodian money changers or money changers in Vietnam who use the black market rate, earning the difference with the official rate.

ATM transaction fees eat into these profits, but even accounting for such costs, Higgins said the Techcombank users were likely earning about $20,000 for every $1 million in cash withdrawn.

Techcombank, he added, is uniquely exposed to the scheme.

While most Vietnamese banks charge international transaction fees to make up for the difference between the dong’s official and unofficial rates, Techombank’s fees are unusually low.

Link: http://www.phnompenhpost.com/index.php/2011012746406/National-news/money-for-nothing.html

[PattayaParent]

They just need to change the US$ in their machines to Cambodian Riel and then there won't be a problem.

You can actually save on the rate differences in country if you have to pay someone in US$.

[Penefattore]

is Vietnam worth a visit or too much stress?

no it isn't

[PhilHarries]

Correct assumption, I am from CM therefore the THB hint is helpful indeed.

Off the topic,

I am hampered in my walking ability. What I 've been hearing about traffic, crossing roads plus no idea if sidewalks are any different from Thailand leads to the basic question= is Vietnam worth a visit or too much stress?

You'll have little problem crossing the road, the traffic moves slowly in HCMC and there are traffic lights at most junctions, just beware when the green man starts flashing you've got about five seconds. If all else fails find a local and tag on to them across the road and you'll soon get the hang of it.

The side walks in District 1, I'm assuming you are talking HCMC, are variable. Some are new and very smooth going, some are rough as an assault course and cluttered with motorbikes etc but then you use the road. So it's very similar to Bangkok and metered taxis abound and in two years here I've never had a problem, the driver switches the meter on straight away, never had to ask. A couple of times the driver has gone a bit of an imaginative route but the difference was circa 5k (25c) on an 80k fare so not worth getting worked up over.

Viet Nam is worth a visit and is probably less stressful than Thailand. VN is still very much Asian, the multinational corporations have not made too many inroads yet. Architecturally HCMC is generally about on a par with Bangkok, mostly ugly concrete shophouse buildings though Bangkok does have more attractions.

As for the dollar withdrawals this must be a new thing as I have never had a moments hassle withdrawing USD from my VietCombank account. Last time was last December and the amount was a few 10's of thousands. In fact I have less hassle withdrawing large amounts of cash here than I do in the UK where I can fully understand why people rob banks - it's about the only way to get your money out.

[cardholder]

is Vietnam worth a visit or too much stress?

no it isn't

care to add any reasons ?

[PattayaParent]

is Vietnam worth a visit or too much stress?

no it isn't

care to add any reasons ?

I guess he means, no it isn't too much stress.

[Penefattore]

is Vietnam worth a visit or too much stress?

no it isn't

care to add any reasons ?

I guess he means, no it isn't too much stress.

nope, I meant it's not worth visiting. Just imagine a Thailand with less comforts and more scams.

[cardholder]

nope, I meant it's not worth visiting. Just imagine a Thailand with less comforts and more scams.

I would still like to go.

For me, Vietnam is just a name in the history books and, now that I live in SE Asia, I would like to see more.

Any constructive advice about making a visit - I can live with lesser comforts for a few days and will take extra care to look out for the scams.

[Penefattore]

well, you can start forking out 1,700 baht for your visa. Remember to specify the exact day you are going there, as the visa is valid only on a given 30 days period.

[Mobaan]

Please let us know about your experience if/once you visited VT.

I might want to be right behind you -also want visit for the reasons you stated.

nope, I meant it's not worth visiting. Just imagine a Thailand with less comforts and more scams.

I would still like to go.

For me, Vietnam is just a name in the history books and, now that I live in SE Asia, I would like to see more.

Any constructive advice about making a visit - I can live with lesser comforts for a few days and will take extra care to look out for the scams.

[PattayaParent]

I guess he means, no it isn't too much stress.

nope, I meant it's not worth visiting. Just imagine a Thailand with less comforts and more scams.

You're lucky you never came to Thailand 10 or more years ago then.

I've never stayed in the Hilton in Thailand but the one in Ha Noi is very comfortable, and the Melia.

And the Mercedes I've been chauffeured around in Viet Nam has been just as comfortable as the Mercedes in Bangkok, but with much less traffic problems.

The topic title is out of date now by the way, the currency has been revalued and the black market suspended.

[PattayaParent]

I guess he means, no it isn't too much stress.

nope, I meant it's not worth visiting. Just imagine a Thailand with less comforts and more scams.

You're lucky you never came to Thailand 10 or more years ago then.

I've never stayed in the Hilton in Thailand but the one in Ha Noi is very comfortable, and the Melia.

And the Mercedes I've been chauffeured around in Viet Nam has been just as comfortable as the Mercedes in Bangkok, but with much less traffic problems.

The topic title is out of date now by the way, the currency has been revalued and the black market suspended.