Vietnam Currency Devalues, Drops to Record-Low
Aug. 18 – Vietnam’s currency, the dong, dropped a further 1.1 percent to VND19,320 against the U.S. dollar from VND19,425 earlier as part of government efforts to rally economic growth and increase exports, said economists.
Yesterday, the central bank let the dong’s daily reference rate slip by 2 percent to VND18,932 per dollar. “The main reason for the central bank’s move is to balance onshore foreign-exchange demand-and-supply and to support exporters,” said Prakriti Sofat, a Singapore-based economist at Barclays Capital. “Vietnam largely exports low value- added goods and typically competes on prices.”
The central bank has devalued the dong three times since November last year. Authorities are aiming for a 6.5 percent growth target for the economy this year and wants to reign in the widening trade deficit.
From January to July, exports increased by 17.5 percent while imports grew by 25.5 percent, leading to a trade deficit worth US$7.4 billion, close to double last year’s figures.