VIB Bank's Vu Says Dong Trading Band Widening Is `Good Move'

Han Ngoc Vu, Hanoi-based general director of Viet Nam International Commercial Joint Stock Bank, known as VIB Bank, comments on a doubling of the dong trading band, inflation, and Vietnam's five-year bonds.

The currency is from today allowed to trade up to 2% on either side of a daily reference rate set by the central bank. Consumer prices gained 26.8% in June from a year earlier, and 2.1% from the previous month, the government said yesterday.

On a wider dong trading band:

``This is a good move by the central bank. The Vietnamese government doesn't plan to let the dong depreciate, therefore the country isn't going to make any policy that may disrupt the economy.

``The widening to 2% from 1% is relatively small. It shouldn't be considered as a move to devalue the currency.''

On inflation:

``Although inflation is still high, the lower pace of consumer price increases in June shows the government's measures to curb inflation are beginning to effective.''

On Viet Nam's five-year bonds:

``A slower pace of widening in the trade deficit and inflation in June may help ease concerns of investors about the economy. Thus, they may probably feel more confident to invest in bonds.

``I expect bond prices will have chance to rise today.'' (Bloomberg)