The unofficial market of money exchange is currently enjoying a brisk trade because banks cannot meet the seasonal demand for newly minted small-denomination banknotes for use during Vietnamese Tet holidays, or the Lunar New Year, that falls in early February this year.
During the Tet period, Vietnamese usually put small-denomination notes in red envelopes and present them as lì xì (lucky money) to relatives, especially children, together with all their best wishes.
Despite their claims of adequate supply of small-denomination notes, most of the banks just give them to their loyal, corporate, and VIP clients. The underground market is therefore cashing in on this once-upon-a-year opportunity to charge exorbitant fees for the service.
For the 5,000 dong, 10,000 dong, and 20,000 dong notes, they charge a 20 percent commission. The smaller the note is, the higher the commission will be.
Online money exchanging also springs up this year. Service charges vary and can be as high as 45 percent.
One website quotes their fees as follows: 45 percent for the 200 dong note, 25 percent for the 500 dong note, 12 percent for the 1,000 dong and 2,000 dong notes, and 1-9 percent for notes of 5,000 to 100,000 dong denominational value.
Traders are also selling one-dollar and two-dollar bills at the moment. Depending on the uniqueness and serial numbers of the notes, those can be exchanged at various prices. For example, one trader sells a 1 dollar bill at VND25,000 and a 2 dollar bill at VND49,000 or 50,000.
The official exchange rate at present is VND19,500 to the dollar.
