Consumer prices will rise less than 12 percent at worst and about 8.5 percent in a “good” scenario, central bank Governor Nguyen Van Binh said on Jan. 12. Inflation in the $104 billion economy was 18.1 percent in December. The dong will depreciate 2 percent to 3 percent this year, Binh said. That would be the least since 2007, according to data compiled by Bloomberg.
“After the central bank governor said they would devalue the dong by no more than 3 percent this year, demand for the dollar has dropped as people may think keeping the foreign currency won’t generate high returns,” said Cao Tan Phat, a Ho Chi Minh City-based analyst at ACB Securities Inc.
The dong gained 0.3 percent to 20,935 per dollar as of 3:29 p.m. in Hanoi, according to data compiled by Bloomberg. That was its strongest level since Dec. 16. The central bank set the currency’s reference rate unchanged at 20,828, its website showed.
The dong declined 7.4 percent last year as policy makers devalued the currency by about 7 percent in February to help narrow the gap between the official and black-market rates.
The yield on the government’s five-year bonds was unchanged at 12.46 percent, according to daily fixings from banks compiled by Bloomberg.
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