Vietnam Dong Drops to Record Low on Trade Deficit, Gold Imports
Vietnam Dong Drops to Record Low on Trade Deficit, Gold Imports
by lexie Wed Oct 19, 2011 11:10 am
October 19, 2011
Vietnam Dong Drops to Record Low on Trade Deficit, Gold Imports
Vietnam’s dong fell to a record low on speculation a widening trade deficit and increased gold imports have bolstered demand for dollars. Government bonds declined.
The trade deficit jumped to $1 billion last month from a revised $396 million in August, government data show. Vietnam has imported $1.5 billion of gold in the January through September period, Tien Phong newspaper reported Oct. 4, citing the Ministry of Industry and Trade. The country imported about $600 million of gold in September alone, according to the report.
“I expect the balance of payments to bear the consequences of the State Bank of Vietnam’s decision to increase the gold- import quota,” Francois Chavasseau, head of fixed-income research at Sacombank Securities Joint-Stock Co. in Ho Chi Minh City, wrote in an e-mail to Bloomberg. “A higher trade deficit combined with dwindling foreign-exchange reserves is putting more pressure on the dong.”
The dong slid 0.1 percent to 20,938 per dollar as of 4:05 p.m. in Hanoi, the weakest level since Bloomberg began collecting data on it in 1993. The State Bank of Vietnam set the daily reference rate 0.05 percent weaker at 20,733 per dollar, the ninth time this month it fixed a lower level, according to its website. The currency is allowed to trade up to 1 percent on either side of the fixing.
People are moving away from the dong after the central bank forced banks to strictly comply with dong-deposit interest-rate caps and businesses are starting “to rush to unwind their dollar loans,” also putting pressure on the local currency, Chavasseau said.
The yield on the government’s five-year bonds rose one basis point, or 0.01 percentage point, to 12.41 percent, according to a daily fixing price from banks compiled by Bloomberg.
http://www.vietfinancenews.com/2011/10/vietnam-dong-drops-to-record-low-on.html#more
Vietnam Dong Drops to Record Low on Trade Deficit, Gold Imports
Vietnam’s dong fell to a record low on speculation a widening trade deficit and increased gold imports have bolstered demand for dollars. Government bonds declined.
The trade deficit jumped to $1 billion last month from a revised $396 million in August, government data show. Vietnam has imported $1.5 billion of gold in the January through September period, Tien Phong newspaper reported Oct. 4, citing the Ministry of Industry and Trade. The country imported about $600 million of gold in September alone, according to the report.
“I expect the balance of payments to bear the consequences of the State Bank of Vietnam’s decision to increase the gold- import quota,” Francois Chavasseau, head of fixed-income research at Sacombank Securities Joint-Stock Co. in Ho Chi Minh City, wrote in an e-mail to Bloomberg. “A higher trade deficit combined with dwindling foreign-exchange reserves is putting more pressure on the dong.”
The dong slid 0.1 percent to 20,938 per dollar as of 4:05 p.m. in Hanoi, the weakest level since Bloomberg began collecting data on it in 1993. The State Bank of Vietnam set the daily reference rate 0.05 percent weaker at 20,733 per dollar, the ninth time this month it fixed a lower level, according to its website. The currency is allowed to trade up to 1 percent on either side of the fixing.
People are moving away from the dong after the central bank forced banks to strictly comply with dong-deposit interest-rate caps and businesses are starting “to rush to unwind their dollar loans,” also putting pressure on the local currency, Chavasseau said.
The yield on the government’s five-year bonds rose one basis point, or 0.01 percentage point, to 12.41 percent, according to a daily fixing price from banks compiled by Bloomberg.
http://www.vietfinancenews.com/2011/10/vietnam-dong-drops-to-record-low-on.html#more
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Join date : 2011-06-24 
Similar topics» Vietnam Dong Advances a Second Day After Trade Deficit Narrows
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