VietFinanceNews.com - Vietnam sees no reasons to further devalue the Vietnamese dong, a state-run newspaper quoted a central bank official on Thursday as saying, after the World Bank said confidence in the currency was returning.




State Bank of Vietnam Deputy Governor Nguyen Van Binh made the comment on Wednesday during a mid-year donors' meeting in southern Vietnam, the official Tuoi Tre newspaper reported.


Vietnam has devalued the dong four times in the past two years and the unofficial dong rate has traded during that period almost exclusively outside the weak end of the central bank mandated currency band.


However, since the last devaluation in February and a move by the central bank to free lending rates from a cap, the unofficial exchange rate has strengthened to within the trading band.


Also at the donors' meeting, Prime Minister Nguyen Tan Dung said Vietnam's foreign reserves were equivalent to nine weeks of imports and could reach 12 weeks by the year end, the newspaper said.


Dung made the comment as an International Monetary Fund report on Wednesday said the country's foreign exchange reserves were equal to about seven weeks of imports, despite increasing by about $1 billion so far in the second quarter.


Confidence in the Vietnamese dong is returning after a year of pressure and widespread expectations of devaluation, and the unofficial rate may continue to strengthen, the World Bank said on Wednesday.


Binh said Vietnam's bad debt level was now kept below 2.5 percent of loans, Tuoi Tre said.


"There were concerns about bad debt in 2009 but it has now been controlled well, below a level of 2.5 percent which is a safe rate," he was quoted a saying.


Central bank data show Vietnam's bad debt edged up to 2.09 percent of loans in February from 2.03 percent at the end of 2009. (Reuters)