Bloomberg News

Vietnam Dong Weakens to Lowest Level Since October: Hanoi Mover

February 20, 2013

Vietnam’s dong weakened to an October low on speculation importer demand for dollars increased to pay overseas suppliers. Five-year bonds were steady.

The dong fell 0.2 percent to 20,890 per dollar at the close in Hanoi, the lowest level since Oct. 8, according to prices from banks compiled by Bloomberg. The central bank fixed the reference rate at 20,828, unchanged since December 2011, according to its website. The currency is allowed to trade as much as 1 percent on either side of the rate.

“Companies are buying more dollars these days to pay overseas suppliers as contracts become due,” said Nguyen Hong Ha, a Hanoi-based currency trader at Vietnam International Bank.

Authorities won’t lift the dong’s reference rate “now” due to inflation concerns, Gafin newswire reported today, citing Nguyen Thi Hong, the central bank’s head of monetary policy. Month-on-month inflation may accelerate in February from 1.25 percent in January, she said, according to Gafin. The dong traded at around 21,100 per dollar today in the so-called black market, Gafin reported.

The yield on the benchmark five-year government bonds was unchanged at 9.20 percent, according to a daily fixing from banks compiled by Bloomberg.

To contact Bloomberg News staff for this story: Nguyen Dieu Tu Uyen in Hanoi at uyen1@bloomberg.net

To contact the editor responsible for this story: James Regan at jregan19@bloomberg.net


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