Dong falls to four-month low as Vietnam may boost gold imports

The Vietnamese dong fell to a four- month low on speculation the nation will allow more gold imports to cool local prices, widening the trade deficit. Government bonds fell.

The State Bank of Vietnam permitted local companies on Aug. 9 to buy a total five metric tons of gold after domestic bullion prices surged to a record. The bank has indicated it may let businesses import an additional five tons to meet demand. The trade shortfall was $6.6 billion in the seven months through July, according to government data.

The central bank “may carry out a second official import of gold in order to cool down” the market and discourage illegal imports, ACB Securities Inc. said in a report dated Aug. 19. “This may have a negative impact on the trade balance.”

The dong fell 0.2 percent to 20,820 per dollar as of 2:47 p.m. in Hanoi, according to data compiled by Bloomberg. The currency has weakened 1.2 percent this month, headed for the biggest decline since February.

The central bank set the dong-dollar reference rate at 20,618 today, unchanged since Aug. 10, according to its website. The local currency is allowed to trade up to 1 percent on either side of the fixing.

International gold prices rose for a sixth day to an all- time high as a global economic slowdown bolstered demand for safer assets. Immediate-delivery bullion gained as much as 1.6 percent to $1,882.55 an ounce, and traded at $1,881.50 at 2:14 p.m. in Singapore. In Vietnam, gold rose to as high as 48.75 million dong ($2,341) per tael in Hanoi as of 2:30 p.m. local time, according to information from Vietnam Posts and Telecommunications. One tael is about 1.2 ounces.

The yield on Vietnam’s five-year bonds climbed seven basis points, or 0.07 percentage point, to 12.57 percent, according to a daily fixing price from banks compiled by Bloomberg.

Source Bloomberg News

Tags: vietnam gold, Vietnam gold imports, Vietnam gold market