2:21:08 PM | 26/12/2007
The State Bank of Vietnam (SBV) on Monday [December 24] decided to widen the trading band between the dollar and the dong to plus or minus 0.75 per cent from 0.5 per cent previously, SBV Governor Nguyen Van Giau said in a directive signed on the day with immediate effect.
SBV sets an official exchange rate for the dollar and the dong for daily transactions on the inter-bank market and banks are now allowed to trade at a 0.75 per cent differential to that rate.
This is the third time SBV extended the trading band between the dollar and the dong so far. The 0.5 per cent band had been in place since January 2, 2007, which was doubled from 0.25 per cent imposed in July 2002.
The move has allowed commercial banks to trade U.S. dollar more freely against the Vietnamese dong, given a rising dollar inflow in Vietnam, one of the youngest members of the World Trade Organization (WTO).
Dealers said a wider band would make it easier for them to buy the dong, as demand for the currency is on the rise, boosted by corporate year-end demand and ahead of an IPO December 26 of Vietcombank.
The official rate stood at VND16,113 per dollar Monday, down 0.08 per cent from the end of 2006. The dollar was trading at VND16,035 to VND16,040 as at 0325 GMT, from VND16,038 to VND16,048 at the start of the day. (Banking Times, Labor)
Vietnamese
