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Calyon expects further depreciation in Vietnam dong

Date: 26 Nov 2009

The State Bank of Vietnam devalued the currency 5.4% to curb a widening trade deficit and present a more rapid decline in foreign exchange reserves. However, there are fears it could fuel further inflation pressures.

Keywords (click to search): [Vietnam] [dong] [foreign exchange] [Calyon] [Mitul Kotecha] [inflation]

Pamela Tang
The Vietnamese dong looks set to depreciate further after the country’s central bank devalued the currency by 5.4% yesterday (November 25), according to Calyon.

The surprise move was designed to curb a widening trade deficit. It was also introduced to prevent a more rapid decline in foreign exchange reserves, which the State Bank of Vietnam has been using to prop up the dong.

At the time of writing, the currency was trading at 17.961 against the US dollar. The new rules also restrict the...

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