Vietnam Dong drops to weakest since 1993 on reference-rate cue

The Vietnamese dong on April 5 dropped to its weakest level against the dollar since 1993 as the central bank set the currency’s reference rate lower. Government bonds were steady.

The State Bank of Vietnam set the reference rate at 20,713, compared with 20,703 yesterday, according to its website. The currency is allowed to trade up to 1 percent on either side of the rate. Policy makers are seeking to narrow the gap between official and unofficial market rates, said Marc Djandji, the head of research at Viet Capital Securities.

“The objective that the bank has now by changing the exchange rate is just to close that gap and make it more attractive for people to go through the official market,” Ho Chi Minh City-based Djandji said.

The dong declined 0.2 percent, the most since Feb. 24, to 20,918 per dollar as of 5:00 p.m. in Hanoi, according to data from banks compiled by Bloomberg. The currency touched 20,920, the weakest level since June 1993.

Government bonds were steady, with yields on benchmark five-year notes little changed at 11.93 percent, according to a daily fixing rate from banks compiled by Bloomberg – Bloomberg News

Tags: vietnam dong

Posted by VBN on Apr 6 2011. Filed under Banking-Finance. You can follow any responses to this entry through the RSS 2.0. You can leave a response or trackback to this entry