Vietnam’s currency had the biggest weekly decline since June amid escalating tensions with China after that country positioned an oil rig in Vietnamese territorial waters.
The Vietnamese government has denounced China’s placement of the oil rig and protesters rallied in Ho Chi Minh City and the capital Hanoi over the weekend. Prime Minister Nguyen Tan Dung called on members of the Association of Southeast Asian Nations to show support over the issue.
The dong declined 0.31 percent to 21,165 per dollar this week, the most since the five days ended June 28, 2013, according to prices from banks compiled by Bloomberg. The currency fell 0.2 percent as of 4:45 p.m. local time. The central bank kept its daily reference rate unchanged at 21,036, according to its website. The currency is allowed to trade as much as 1 percent on either side of the fixing.
“The exchange rate has depreciated due to rising tensions between Vietnam and China since last week,” VPBank Securities wrote in a research note yesterday. “The domestic gold market was also spurred by the tensions and by protests against China in many major cities in Vietnam.”
Vietnamese gold prices rose for five straight days to 36.3 million dong ($1,715.10) a tael yesterday, the highest in almost two months, according to data from Saigon Jewelery Co. compiled by Bloomberg.
The five-year bond yield gained seven basis points today and 12 basis points this week to 7.27 percent, according to a daily fixing from banks compiled by Bloomberg.