SSI: Vietnam May Devalue Dong by 4 Percent
May 13 – Vietnam may devalue its currency again by 4 percent this year to help exports and manage trade deficit, according to the country’s second largest brokerage firm.
“The risk from the trade and balance of payments deficits remains,” said Nguyen Duy Hung, Saigon Securities Joint-Stock Co. chairman, in a May 7 telephone interview. “A weaker dong is needed to spur exports and to stabilize the foreign-currency market.”
The State Bank of Vietnam said last week that the country wants to limit trade deficit to not more than 20 percent of exports. During the first four months of the year, the trade deficit gap amounted to US$4.65 billion or about 23 percent of exports.
“Even though the trade deficit is still high, foreign-currency sources are expected to improve this year, especially tourism and remittances,” Central Bank Deputy Governor Nguyen Van Binh said in a statement. “Foreign indirect investment capital inflows show signs of increasing also.”
The Vietnamese dong declined by 5.9 percent in the last six months to VND18,995 per U.S. dollar. The currency reported a record low of VND19,100 in February.
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