Vietnam Devalues 3 per cent of Dong, Keep Forex Trading Band Unchanged December 25
The State Bank of Vietnam, the country’s central bank, has issued a decision to devalue the dong by 3 per cent effective from December 25 and keep the forex trading band unchanged as part of boost exports to avert recession, Vietnamese state media said.
“Vietnam has let the dong on the interbank market dip 3 per cent against the dollar at VND16,989/$1 from Thursday Dec 25 in order to help stabilize the local forex market and expand exports,” Nguyen Van Giau told mass media at a year-end press conference.
“The SBV has keep forex trading band unchanged at minus and plus 3 per cent,” Giau said.
“The decision today merely reflects the supply and demand conditions that have built up in recent weeks, and trade and investment flows have put pressure on the dong,” Michael Woolfolk, senior currency strategist at Bank of New York Mellon.
Vietcombank, a key banks of the local forex market, has quoted bid rate of dollar at VND17,280 and ask rate at VND17,450 on December 25.
Vietnam’s trade deficit is estimated to jump 20.6 per cent to $17 billion.
Giau also added that Vietnam’s forex reserves exceeded $20.3 billion of the last year.
FDI disbursements this year are estimated to hit over $10 billion.
The Asean country has posted GDP growth rate of 6.23 per cent this year, below the set target of 6.5 per cent, inflation easing at 19.9 per cent. (Youth, HCMC Law)
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