Sunday, June 08, 2008

Vietnam PM: Won't Devalue Dong, May Soon Wider Trading Band-BIDV

Dow Jones

June 06, 2008: 08:11 AM EST

HANOI -(Dow Jones)- Vietnam's Prime Minister Nguyen Tan Dung said the government has no plan to devalue the dong but may soon widen the currency's trading band, the country's second biggest state-owned bank said in a statement following a meeting Friday with Dung.

The prime minister, who met with a JP Morgan chief economist David Fernandez and General Director Tran Bac Ha of the Bank for Investment and Development of Vietnam, said the country is financially strong and had a surplus of $1 billion in its current account during the first five months of this year, according to BIDV.

"Though Vietnam is under pressure the country has no reason to devalue the dong," Dung said, according to the statement.

Dung said that because Vietnam has a surplus of foreign exchange, the daily trading band for the dong could soon be widened to plus or minus 2% around the officially set rate, up from 1% now.

It's government policy to have a 2% trading band against the dollar but the central bank continues to keep the dong in a 1% band.

-By Nguyen Pham Muoi, Dow Jones Newswires, 84-913-220-614; phammuoi.nguyen@