Vietnam PM orders central bank to stabilize forex, gold rates

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Prime Minister Nguyen Tan Dung Wednesday ordered the central bank to take strong measures to keep the exchange rate and gold prices stable.

The State Bank of Vietnam needs to work with other ministries and provincial authorities to strengthen inspections and strictly deal with illegal gold and forex trading activities, he said in a directive published on the government's website.

The prime minister also asked the central bank to gradually bring down interest rates and ensure enough capital for manufacturers.

Vietnam last month increased penalties for foreign currency and gold trading violations, raising the maximum fine to VND500 million (US$23,860).

Illegal forex traders now face fines between VND300-500 million, compared to VND45-70 million previously.

The downward pressure on the dong usually grows towards the end of the year, when the dollar demand for imports and debt payments increases.

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Nguyen Hoang Minh, deputy director of the central bank's Ho Chi Minh City branch, said local banks at times failed to supply enough dollars to people who need to go abroad, especially in the last months of the year.

He said the monetary authority has been informed of some cases in which commercial banks sold US dollars at higher rates than allowed.

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