Three-month non-deliverable forwards fell 2.1 percent to 19,125 as of 4:27 p.m. in Hanoi, the biggest drop since Sept. 1. That suggests traders are betting on a 6.6 percent slide in the currency from the spot rate of 17,862. Forwards are agreements in which assets are bought and sold at current prices for future delivery. Non-deliverable contracts are settled in dollars.

“I expect the dong to drop to between VND18,800 per dollar to 19,000 by the end of the year,” said Trinh Hoai Giang, deputy general director at Ho Chi Minh City Securities Corp. “Demand for dollars is increasing and we have limited foreign currency supply due to a widening trade deficit, shrinking remittances and falling foreign investments.”

The trade deficit widened to $1.9 billion in October from $1.8 billion in September and $1.3 billion in August, official figures show. Pledged investment by overseas companies tumbled 73 percent in the 10 months through October to $18.93 billion, the government reported Oct. 28.

The dong was little changed Thursday after reaching a record low of 17,865 on Wednesday, according to prices from banks compiled by Bloomberg. The State Bank of Vietnam on Thursday set the daily reference rate at 17,013 versus 17,014 on Wednesday. The currency is allowed to fluctuate by as much as 5 percent on either side of that rate.

The dong fetched between VND18,630 and 18,680 per dollar at money changers in Ho Chi Minh City as of 2 p.m. Thursday, compared with 18,570 to 18,620 Wednesday, according to a telephone directory information service, known as 1080, run by state-owned Vietnam Posts & Telecommunications.

The yield on the benchmark five-year bonds rose six basis points to 10.40 percent, the highest since Dec. 8, 2008, according to a daily fixing price from banks compiled by Bloomberg. A basis point is 0.01 percentage point.

Source: Bloomberg