Vietnam dong gains on deposit-insurance speculation

TN News

Email Print

Vietnam's dong rose the most in a month on Thursday on speculation policy makers will exclude foreign-currency bank savings from deposit insurance, making it less attractive to keep money in dollars.

A standing committee of the national assembly agreed with a government proposal that foreign currency and precious metals shouldn't be included in a proposed bank-deposit guarantee scheme, the Thanh Nien newspaper reported Thursday. Government bonds rose the most in a week after the country appointed Standard Chartered Bank Plc to advise on improving its sovereign debt rating to attract foreign investment.

"As the government may not guarantee dollar deposits, demand for savings in the currency will decrease," said Nguyen Duy Phong, a Ho Chi Minh City-based analyst at Viet Capital Securities.

The dong gained 0.8 percent, the most since Feb. 21, to 20,870 dong per dollar as of 4:30 p.m. local time on Thursday, according to data compiled by Bloomberg. The currency advanced as much as 1.9 percent earlier, the most since 1997.

The central bank set the reference rate at 20,828, unchanged since Dec. 26, its website showed. The currency is allowed to trade as much as 1 percent on either side of the official rate.

The yield on five-year notes fell three basis points, or 0.03 percentage point, to 11.49 percent, according to a daily fixing from banks compiled by Bloomberg.

More Business News