Vietnam Sets Dong Fixing at Record Low as Dollar Strength Grows

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. The previous session could see the dong fall to its lowest level in more than two years.

Meanwhile, the risky Korean won is reaching the widely monitored 1400 mark, and the Chinese yuan is teetering on the brink 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. Bloomberg reported.

The State Bank of Vietnam did not reply quickly to inquiries about the adjustment. The central bank permits the dong to trade within a 3% range on each side of the daily reference rate, which is based on eight currencies.

Source: Bloomberg