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Banking & Finance: Vietnam Widens USD/VND Trading Band
[December 25, 2007]

Banking & Finance: Vietnam Widens USD/VND Trading Band

(Vietnam News Briefs Via Thomson Dialog NewsEdge) from the VIETNAM NEWS BRIEFS, December 25, 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% from 0.5% 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% 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% band had been in place since January 2, 2007, which was doubled from 0.25% 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% 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 Dec 25 p3, Young People Dec 25 p7, Labor Dec 25 p1) Copyright 2007 Vietnam News Briefs

Copyright 2007 Toan Viet Ltd, Source: The Financial Times Limited

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