State still vying to end use of the greenback

PUBLISHED : Saturday, 27 November, 2004, 12:00am
UPDATED : Saturday, 27 November, 2004, 12:00am

Vietnamese authorities are still trying to crack down on the use of the country's unofficial currency, the US dollar.

The State Bank of Vietnam has issued another directive banning the advertisement of goods and services using dollar prices.

'Frankly, our economy is being 'dollarised',' said the state-owned Vietnam Economic Times in a recent editorial.

Advertising and trading in the almighty buck has gained steam in step with the country's rapid economic development. US dollar prices are routinely used for more expensive items like vehicles and electronics, as well as in upscale restaurants and other establishments frequented by foreigners.

'We are just trying to make it easier for the tourists,' said one jewellery shop owner in Hanoi's Old Quarter.

Meantime, US dollar deposits in commercial banks continue to rise, now topping US$7 billion, a vast sum in a country with an average per head GDP of just US$500. And foreign companies operating in Vietnam often pay their employees in dollars.

Domestic analysts say foreign influence combines with shaky public confidence in the domestic currency, the dong, to boost use of the dollar. Years of hyperinflation in the past made the dong one of the world's most inflated currencies, but it has remained relatively stable in recent years, now trading at about 15,700 to the dollar.

The government, fearing for the survival of the dong, which is not convertible, has issued ordinances in the past prohibiting the advertisement and use of dollars.

But those have proven ineffective, state media say, leading to yet another directive.

One month after it was issued, it appears little has changed. Even state-owned newspapers and magazines still accept ads listing prices in dollars.

And shops with big-ticket items continue to do likewise, even those that get few foreign customers.