Each euro on the free market this morning increased slightly by 50-100 dong, but it is still depreciating about 9-10% compared to the beginning of the year, so people are actively buying.
The free euro price on July 17 recovered slightly, reaching close to the 24,900 dong mark, 600-700 dong higher in both buying and selling directions compared to the listed prices at banks. However, compared to the beginning of the year, the price of the common currency in the EU is still decreasing by about 9-10%.
The owner of a foreign currency exchange in Hanoi said that witnessing the downward trend of the euro, the demand to buy this currency is growing, many buying and selling points do not meet the market demand.
Preparing for a trip to Europe next week, this morning, Ms. Tuyet (Thanh Xuan, Hanoi) went to a foreign currency exchange point on Ha Trung Street to exchange 3,500 euros. The price here is 24,870 VND per euro, a slight increase of 50 VND compared to Friday.
“I wanted to change more, but the shop owner promised to come back in the afternoon, because the number of customers changed suddenly and temporarily ran out,” she said.
As noted by VnExpress at foreign currency exchange points in Hanoi today, most people come to buy euros instead of selling. Thanks to the buying psychology when the price is low, the EU currency has increased slightly on the free market in the past week, about 50-100 dong.
“During the European tourist season, the number of visitors to exchange this currency often increases. Especially when the euro’s price is equal to the USD, people begin to tend to buy this currency to store instead of USD,” said the owner of an agent. Foreign currency exchangers at Nguyen Trai Street (Thanh Xuan, Hanoi) shared, but he did not disclose the daily amount of the shop’s euro exchange.
Two 50 euro coins are exchanged for 100 USD, the exchange rate has been maintained since July 12 in the international market. Photo: Bloomberg
According to experts, the price of euros compared to the beginning of the year is 2,000-2,200 dong lower than the beginning of the year, so many people buy with the expectation that the price will increase and then sell. And the number that has hoarded this coin because of a loss should not be sold. Therefore, the psychology of buying and collecting euros in the past few days is the result of psychological developments when the euro “shakes”.
On the international market, on 12/7 for the first time in 20 years one euro for one dollar. According to analysts, the cause of the euro’s depreciation is a sharp increase in gas prices, and uncertainty about energy supplies from Russia, which has raised fears of a recession in the currency area. A weak euro will make imports to Europe more expensive, causing inflation to rise, but it will benefit exporters in this region.
Analysts’ forecasts show that the euro price may continue to fall, around 0.95 – 0.97 USD per euro, if the energy crisis in Europe worsens.
Movement of euro – USD price in the past year. Graph: Reuters
For Vietnam, the most obvious impact is on import and export at this time. However, according to Dr. Can Van Luc, BIDV’s chief economist, the impact of the weakening euro on import and export is not too great, because currently over 90% of export contracts are paid in USD, only about 6-7% contracts are paid in euros, equivalent to the average of Asia – Pacific countries.
But he said that the depreciation of the euro could put pressure on Vietnam’s exchange rate and inflation. “The degree of influence is not much because Vietnam is still controlling the exchange rate and inflation well. Of course, it is not subjective because exchange rate pressure and inflation are increasing,” Dr. Can Van Luc commented to VnExpress.
The decrease in Euro is also the time when the USD increases rapidly. Dr. Can Van Luc said that when the USD increases in price, it will affect production, business, import and export of goods. In addition, businesses that borrow capital in foreign currencies are more affected when they have to increase business costs…
This expert said that the USD/VND exchange rate tends to increase and is forecasted to increase by 2.5-3% compared to the beginning of the year. This volatility threshold is still under the control of the monetary authority, but the continuous increase in the exchange rate is a negative signal when the second half of the year is the time when the demand for USD is high.