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Dong drops to 3-month low against dollar
Vietnam’s central bank has allowed the dong to fall to the lowest level in more than three months yesterday after inflation worries eased on a steep fall in the price of oil and a rally in the dollar.
The State Bank of Vietnam, or the central bank, set the official exchange rate at VND16,069 per dollar yesterday, the lowest since February 20 when it was VND16,070 per dollar.
Banks are allowed to trade the currencies within a band of plus or minus 1 percent of the official rate daily on the foreign exchange market.
Le Xuan Nghia, the SBV’s director of the banking development strategy department, said yesterday that the dong’s daily trading band was unchanged at plus or minus 1 percent.
The central bank “will issue an official announcement when it decides to change the daily trading band,” he added.
The Wall Street Journal reported earlier yesterday that the State Bank of Vietnam (SBV) had doubled the currency’s daily limit to 2 percent on either side of the daily fixing rate.
The change would give the authorities more scope to manage the economy, the newspaper said.
The SBV said last month it planned to widen the dong’s daily trading band on either side of the reference rate to 2 percent from 1 percent, without giving a target date for any change.
The central bank has been buying foreign exchange since last year when a record foreign investment inflow started arriving in Vietnam which joined the World Trade Organization in January 2007.
The purchase has helped nearly double Vietnam’s foreign exchange reserves to US$20 billion at the end of 2007, from $12 billion in 2006, central bank figures show.
Thanhnien
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