Illegal money exchange a normal practice in Vietnam

By Le Chi, Dat Nguyen   October 25, 2018 | 05:19 pm PT
Illegal money exchange a normal practice in Vietnam
In Vietnam, buying and selling foreign currencies on the free market is against the law. Photo by Reuters
The unofficial currency exchange market functions normally in Vietnam although a man was recently fined heavily for a $100 transaction.

It was business as usual Wednesday with many gold sellers near the Ben Thanh Market in HCMC’s District 1 offering currency exchange services.

One gold shop, which was selling a dollar for VND23,490, and buying it for VND23,440, said better prices would be offered for large transactions.

The seller said that customers are either taken inside the shop to receive money away from the public eye; or they could ask for the cash to be delivered at a place of their choice.

Shops on Ha Trung Street, a popular currency exchange destination in Hanoi, were also offering the same service.

An economist in HCMC who asked not be named said that this buying and selling of foreign currency has been happening for a long time although it was illegal, strictly speaking. It was difficult for authorities to manage it, he felt.

Where there is demand, there will be supply, the economist said, adding that the number of authorized money exchange points in the country was low.

Most banks are located in the cities, not in the rural areas, and they require customers to go through a complicated process to exchange money, he noted.

As banks only work during office hours, customers tend to go to a gold shop because it offers quicker and more convenient service, he added.

ABBank financial expert Nguyen Tri Hieu said that although fining a man for exchanging money was legitimate, it was unusual.

“I’ve heard of gold shops being fined for exchanging money before, but never a customer,” he told VnExpress International.

He was referring to case wherein authorities in Can Tho City on Tuesday fined Nguyen Ca Re, a 38-year-old electrician, VND90 million ($3,855) for exchanging a $100 note in a gold shop.

Re said that he had been given the $100 by a relative and had been exchanging dollar notes at gold shops before without any trouble. He also said that with his monthly salary of VND4 million ($171), he doesn’t know how to get the money to pay the VND90 million fine.

Exchanging money via unofficial channels is something Vietnamese people have been doing for years, and hardly anyone has ever been punished, Hieu said.

He proposed that more local exchange points be set up at public places like malls and hotels. He said that each legal exchange point should have a sign to assure customers of their credibility.

But a central bank official said that the current number of exchange points in Vietnam was sufficient.

Nguyen Hoang Minh, vice head of the State Bank of Vietnam's (SBV) Ho Chi Minh City Branch, said that the city had over 70 legal exchange points in airports, hotels and travel spots. This is enough to meet the public demand, he told VnExpress.

Apart from commercial banks, Vietnam has 580 legal exchange points, according to the SBV.

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