Vietnam: Vietnam's Central Bank devaluates dong for the first time in a year
June 19, 2014
On 19 June, the State Bank of Vietnam announced a 1.0% devaluation of the Vietnamese dong (VND) interbank average exchange rate from 21,036 VND per USD to 21,246 VND per USD in an effort to support the country’s exports. The move comes amid rising tensions with China after China’s placement of an oil rig in the waters of the South China Sea, which are claimed by both countries. The adjustment marks the first devaluation since June 2013 when the Bank also devaluated the dong by 1.0%.
As a result of the new exchange rate band of +/-1.0% of the inter-bank average exchange rate, the ceiling exchange rate is now 21,458 VND per USD and the floor rate is 21,034 VND per USD.
Author: Dirina Mançellari, Senior Economist