Vietnam's dong gains on pledge bank-safety ratios to be raised

TN News

Email Print

Vietnam's currency gained the most in more than a week after the central bank said that bank-safety ratios will be raised next year. Benchmark two-year bonds fell.

Safety ratios will be lifted gradually to a "higher" point from Jan. 1, central bank Governor Nguyen Van Giau said Friday. Capital adequacy is one of the safety ratios, and Giau didn't specify which would be increased. The State Bank of Vietnam in May asked financial institutions and banks to raise the capital-adequacy ratio to a minimum 9 percent by Oct. 1 from 8 percent.

"Increasing safety ratios will help make banking activities less risky and safer," said Nguyen Van Tue, vice head of the exchange-rate division at Ocean Bank. "It is one of the factors leading to sustainable development."

The dong appreciated 0.13 percent, its biggest gain since Aug. 2, to 19,075 per dollar as of 3:30 p.m. in Hanoi, according to prices from banks compiled by Bloomberg.

The central bank set the currency's daily reference rate at 18,544, a level unchanged since Feb. 11. The dong is allowed to fluctuate up to 3 percent on either side of the rate.

The dong traded at 19,260 at gold shops in Ho Chi Minh City, unchanged from Thursday, according to a telephone-information service run by state-owned Vietnam Posts & Telecommunications.

The yield on two-year government bonds rose two basis points to 9.94 percent, according to a daily fixing price from banks compiled by Bloomberg. The rate reached an eight-month low of 9.8 percent on July 28.

More Business News