Vietnam set its reference rate for the dong at a record low, setting the stage for more weakness in the Southeast Asian nation’s currency
(Bloomberg) — Vietnam set its reference rate for the dong at a record low, setting the stage for more weakness in the Southeast Asian nation’s currency
The State Bank of Vietnam set the currency fixing at 23,281 dong per dollar on Thursday, the weakest since at least 2005, according to data compiled by Bloomberg. That’s after the dong fell to the lowest in more than two years in the previous session.
Vietnam’s dong is on track to fall for the eighth straight month as the dollar pummels emerging-market currencies to fresh lows. The risk-sensitive Korean won is approaching the closely-watched 1400 mark, while the Chinese yuan is teetering on the edge of the key 7 per dollar level .
“The dong is too strong at the moment for an export-oriented economy,” said Trinh Nguyen, a senior economist at Natixis SA in Hong Kong. “That said, they care about imports and inflation so won’t allow excessive depreciation.”
Nguyen forecasts the dong to approach 24,000 per dollar. The currency rose 0.1% to 23,585 per dollar on Thursday after falling to 23,615 on Wednesday, the lowest since March 2020.
The State Bank of Vietnam didn’t immediately respond to questions on the fixing. The central bank allows the dong to trade within a band of 3% on either side of the reference rate, which is based on eight currencies and is set every day.
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