This entry might be boring to some. So warning!: I am going to discuss the VND:USD exchange rate because it has been a cause of frustration for me for the past month or so. I'll try to explain what I know the best I can, but I think there are many things I don't know nor understand.
The US dollar is highly used in Vietnam, like in many other poor countries. Not only is it widely used, but many things other than souvenirs for tourists are quoted in USD. I pay my Vietnamese classes and rent (the real source of my frustration) in USD.
When we arrived in Vietnam in February, 1 USD was worth about 16,000 dong. This number has been increasing as the USD has become scarce here. Someone is hogging USD, either Vietnamese people hoping it will go up (really, speculating) or possibly even the bank/government trying to decrease the use of USD in the country. The low supply of USD and higher demand is causing the price to increase (I remember something from my economics class...!).
This has caused Vietnam, in the past month or so, to have two exchange rates in the country: the official bank rate and the unofficial black market rate (the rate jewelry stores use). In the past months, in Thanh Nien, a Vietnamese daily, the black market rate was quoted, around 17,500 dong while the bank rate was around 16,400 dong.
You can imagine what this discrepancy instigates... What exchange rate should be used? This is actually quite a big difference when you're paying a large amount like rent. Our rent is 400 USD, but as we have used up our USD we have been paying in VND. My landlady has always gone by the black market rate. Since our rent has been stable (she would ask for an extra 30,000, about 2 USD due to the fluctuating exchange, which shows how petty she is!), I didn't actually realize there were two rates until last month, when she wanted an extra 400,000 dong (about 25 USD). After a heated discussion, we paid the bank rate but were told that next month she would only take USD.
Fast forward to this month. We tried to purchase USD at the bank but the bank had instated a policy that no USD could be purchased, unless you were closing your account. Even then, a request has to be written for the director to review. So no one can purchase USD, other than going to the jewelry store and paying the inflated exchange.
With the bank rate being 16,847 dong and the black market rate nearing 18,500 dong, we knew we were in for a battle. The landlady said she could not accept the bank rate because she would lose out. Really, she's only losing the potential of making more money. The exchange rate is not affecting her costs of running a building. I argued that The Boyfriend's salary is quoted in USD, but is paid in dong, using the bank rate, so we'd be paying an extra 40 USD. She argued we are two people and use a lot of water! What does that have to do with anything???
I asked her what the black market rate is because it wasn't quoted in the Thanh Nien. She said she'd go to a jewelry and check. How dubious does that sound? I think something has happened. Vietnamese people are discouraged to use this rate and so it is no longer quoted in the paper.
Since our lease ends at the end of the month, we figured we had some leverage because we want to stay an extra month. After telling our landlady this, and that we would only stay for the extra month if we paid the bank rate, she told us she'd ask her son. Ten minutes later, she knocked, smiling sheepishly. "Pay the bank rate! It's not a big difference!". Sure, it's not a big difference when you're getting an additional month's rent.
Whether any of this legal, I'm not sure. I just can't imagine this happening in Canada. I understand that the Canadian dollar is not strongly pegged against another currency. But still... When things like this happen, I realize I would not stay in Vietnam for the long term. Things like this would just infuriate me. Of course, next time we'll know better. Ask for a straight out quote in dong for rent or at least demand the bank exchange rate from the get go.