Banks selling US dollar for Vietnamese dong at a higher rate than their posted rate will be "strictly punished," the State Bank of Viet Nam has said. Banks have justified the practice, saying they are short of US dollars, and as a result, must buy the dollar from different sources at a higher price than the official rate.

The SBV has issued a resolution requiring banks to sell the US dollar based on its posted prices, with the trading band set at plus or minus 1 per cent.

"If we discover banks selling over their posted price, we will strictly punish them," Ho Huu Hanh, director of the SBV branch in HCM City said.

Retailers who post selling prices in foreign currency rather than Vietnamese dong are violating the law and will also he penalised, a State Bank of Viet Nam official has said.

Hanh also said that violators who intentionally flaunted the law would be fined VND5-12 million (US$300-720) and could have their trading licences withdrawn. On Monday, most computer electronics shops in Hanoi posted their prices in Vietnam dong based on US dollar exchange rates on the black market.

Three days ago, a computer at a shop on Nguyen Du Street in Hanoi, sold for VND8.14 million but the price yesterday had increased to VND8.37 million, said customer Nguyen Thanh Tung.

An owner of a computer shop on Lang Ha Street in Hanoi said all computer components were imports and thus prices could be set in US dollars. The new USD/VND exchange rate had caused the jump in price, he added.

Phuong Ha, a customer shopping in Hai Ba Trung District in Hanoi, said: "Several days ago, the seller offered me a Flame, an imported motorbike, for US$2,800 (VND50.68 million), and today the price is still the same, but I must pay an 'extra' VND1.4 million because of the rise of the US dollar against the dong."

The situation is the same in HCM City's computer shops, where the price is calculated based on the black market rate.

At Phong Vu computer shop in HCM City, the price was posted in both US dollars and dong.

This followed the Government announcement that posting selling prices in foreign currency was against the law. The shop posted the price in dong but the price has been changing every day according to the dollar rate on the black market.

Vietstock