The US dollar is said to be overheated on the black market because of price manipulation by domestic gold dealers trying to keep prices of the precious metal high.
Tran Hoang Ngan, Deputy Principal of HCM City Economics University and member of National Monetary Policy Consulting Council, said gold and dollar prices in Viet Nam were often volatile when global gold prices rose and fell dramatically.
"Because domestic gold dealers still have gold bars in stock that were imported at high prices, they try to collect dollars and push up the dollar price to cut their losses," said Ngan.
He said that when the global gold price fell by US$40 from $1,380 per ounce on Thursday last week, the domestic gold price should have also fallen instead of hovering around VND33 million ($1,510) per tael (One tael equals 1.2 ounces).
However, many gold dealers defend themselves against the allegation. Chairman of jewellery trading company Doji Group Do Minh Phusaid most gold dealers were worried that the global downtrend in gold would not last long.
"If they lower selling prices immediately, they may have to import additional gold at higher prices or face losses," said Phu.
"In addition, to avoid losses, these dealers also use the market value of the greenback to determine gold prices."
Phu denied the possibility of dollar price manipulation by gold dealers, saying that dollar price hikes resulted from growing demand for imports in the closing months and dollar accumulation by civil groups and enterprises.
Viet Nam Gold Business Corporation (VGB)'s general director Tran Thanh Hai said he shared Phu's view, adding that gold smuggling pushed up the dollar price, as domestic gold prices were now at between VND400,000-500,000 ($20-25) a tael cheaper than global prices (Based on the black market dollar price).
Ngan suggested that the State Bank of Viet Nam instruct general gold corporations to boost sales while working more closely with security agents to supervise the black market.
"If major gold corporations sell out of gold taels, gold market will immediately be cooled down and tension on the FX market eased," the general director of a state-owned bank who ask to be unnamed said.
The central bank this week stated that it was considering dollar injections for commercial banks to meet importers' growing hunger for the greenback in the closing months of the year, when consumer demand for imported goods traditionally rises.