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Dong snaps four-month slide as dollar demand eases
The Vietnamese dong completed the biggest monthly gain since September on speculation demand for dollars will ease after the central bank said this month it has sufficient reserves.
Bonds ended five months of losses.
The currency snapped a four-month decline as the central bank urged people not to rush to buy dollars in a release on its website on July 21, allaying concern the dong was set for a slide.
“Investor fears that the dong would lose value have eased this month and that supported the currency,” said Huynh Thi Thanh Van, head of capital markets at the securities unit of Saigon Thuong Tin Commercial Joint-Stock Bank in Ho Chi Minh City.
“The supply of US currency is abundant now.”
The dong advanced 0.5 percent to VND16,760 against the dollar as of 5 p.m. in Hanoi Thursday, Bloomberg data show, helping trim this year’s decline.
The State Bank of Vietnam fixed the daily reference rate at VND16,495 a dollar Thursday, compared with VND16,497 Wednesday, according to its website.
The currency is allowed to trade up to 2 percent on either side of the rate.
The local currency traded at VND16,900 a dollar on the free market in Hanoi, according to a telephone directory information service run by state-owned Vietnam Posts and Telecommunications.
Bonds advance
Vietnam’s government bonds gained this month on optimism inflation will slow, encouraging investors to buy the nation’s debt securities.
Consumer prices gained 1.1 percent in July from a month ago, the slowest pace since October, after rising 2.1 percent in June, the government said on July 24.
“Most macroeconomic indicators are relatively good in July and that is helping ease selling pressures in the market,” said Hanoi-based Tran Kieu Hung, a trader at the Bank for Investment and Development of Vietnam.
The yields of five-year notes dropped 1.37 percentage points in July, following a surge of 4.28 percent last month, according to a daily fixing price from 10 banks compiled by Bloomberg.
Thanhnien
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