Hanoi - Experts offered different explanations Tuesday for a widening gap between the official and black-market exchange rates of the Vietnamese dong. The dong dropped to 18,070 to the dollar on the black market Tuesday, while the official benchmark rate stayed at
16,936 to the dollar. The government allows banks to vary their rates up to 5 per cent from the official benchmark, so commercial banks were selling dollars for 17,783 dong.

Nguyen Duc Vinh, chairman of the board of Techcombank, the fourth-largest commercial bank in Vietnam, said the high black-market rates reflected companies unable to obtain dollars through official channels.

"Many people want to borrow dollars from banks, but only people who follow the regulations of the State Bank of Vietnam can borrow," Vinh said. Others were forced to exchange for dollars on the black market.

But prominent economist Le Dang Doanh said businesses were not eager to borrow dollars, as Vietnamese imports have slowed dramatically since last fall. Trinh Duc Minh, director of air conditioner distributor Ha Minh Tuan Company, agreed.

"The exchange rate between dollars and dong is very volatile now, so companies do not want to borrow dollars," Minh said.

Vietnam's economy has performed unexpectedly well in certain categories over the first quarter of this year. The country ran a record 1.7-billion-dollar trade surplus, inflation hovered near zero, and domestic consumption was up 22 per cent year-on-year.

But exports have fallen sharply since last fall, and uncertainty over the future remains high.

Expectations of future inflation fueled by the government's 1-billion-dollar stimulus package are leading people to buy black-market dollars as a hedge, said Le Xuan Nghia, deputy chairman of the National Committee for Financial Supervision.

Nghia also blamed banks' practice of demanding that businesses pay "transaction costs" when they ask for dollars, a code for obtaining some of the money through the black market.

"For instance, when an exporter asks to borrow 1 million dollars, commercial banks say they can only lend 0.7 million dollars," Nghia said.

For the other 0.3 million, he said, the banks demand a surcharge so that they can buy the dollars on the black market and charge a commission. "They call it a transaction cost. This is illegal, but it still exists in practice."

Economist Tran Duc Nguyen, former head of the Prime Minister's Research Commission, said he believed foreign investors were withdrawing money from Vietnam, increasing the demand for dollars.

If the dong continues to fall against the dollar, he said, exports will recover. But importers will face more difficulties. (dpa)