Many local banks have increased the bid and ask price for US dollar due to rising short-term demand.

Though the benchmark inter-bank foreign exchange rate at the State Bank of Vietnam (SBV) is still quoted at VND20,828 per US dollar, unchanged from December 24, 2011, the real market rate has started to pick up at the beginning of this week.

At Vietcombank, the ask price of US dollar on Thursday morning increased by VND10 per dollar compared with yesterday to VND21,030 per dollar, only VND6 per dollar lower than the SBV’s ceiling price.

Meanwhile, the ask price of the greenback in the open market this morning rose to VND21,320 per dollar.

At Asia Commercial Joint Stock Bank (ACB), the transfer price of the greenback on Thursday morning was at VND21,035 per dollar, only VND1 per dollar less than the selling prices, also the ceiling rate prescribed by SBV.

Compared to the beginning of the week, the current price of the greenback at the bank rose by VND35 per dollar.

After more than 2 weeks maintaining the rate at around VND21,005 per US dollar, SBV on Friday last week raised the ask price to the ceiling of VND21,036 per US dollar.

Local currency speculators have hoarded the greenback as they predict the central bank will boost gold imports to help local banks finish their gold procurement deadline by the end of this month, thus pushing up the dollar price, experts said.

Another reason is the recent drop in dong deposit interest rates has made local cash-rich people switch to the dollar as a more attractive investment channel, thus raising the demand for the greenback.

The reshuffle of investment portfolios from foreign stock investors and investment funds is also considered as another reason for the rising demand for the US dollar.

Foreign investors posted six straight net-selling sessions with a total VND320 billion ($15.36 million) on Ho Chi Minh Stock Exchange (HoSE) last week. They continued their net-selling mood with VND316 billion ($15.16 million) so far this week.

SBV sold $1 billion worth of US dollar early this month to quench the thirst of the greenback in the local banking system, according to Le Xuan Nghia, former vice head of the National Financial Supervisory Committee at a seminar held by Vietcombank Securities Co on Friday last week in HCMC.