Vietnam widened the dong’s trading band on Wednesday, the central bank said in a statement on its website. The currency can now trade as much as 2 percent either side of a fixing set by the monetary authority, from 1 percent previously. The dong was little changed at 21,825 a dollar as of 8:53 a.m. in Hanoi, data compiled by Bloomberg show. The dong’s fixing was set at 21,673, the same as on Tuesday. The move follows two devaluations of the dong this year, by 1 percent each, in January and May. It also comes after China slashed the yuan’s reference rate by a record 1.9 percent on Tuesday and a further 1.6 percent on Wednesday. The State Bank of Vietnam widened the dong’s daily trading band as China’s currency devaluation “will have a negative impact on the Vietnamese economy,” the central bank said in the statement. … [Read more...] about Vietnam doubles dong’s trading band after China devalues yuan
Vietnam’s dong fell to the brink of its permitted trading range as China’s yuan declined to a four-year low, putting pressure on Asian currencies before an expected increase in U.S. interest rates. The dong slid as much as 0.2 percent to 22,546 a dollar, before trimming its loss to trade at 22,519 as of 5:27 p.m. in Hanoi, according to prices from local banks compiled by Bloomberg. It can trade as much as 3 percent on either side of the official reference rate, which has been left unchanged at 21,890 since the third devaluation of this year on Aug. 19. The weakest level permitted by the current range is 22,547. Emerging-market currencies are weakening across Asia this month as futures indicate the Federal Reserve will raise interest rates this week. A slide in the yuan is gathering momentum as signs build that Chinese policy makers aren’t prepared to target stability versus the greenback and this is having knock-on effects on regional exchange rates. An Aug. 11 yuan … [Read more...] about Vietnam dong tests trading-band limit as yuan drops before Fed
Vietnam doubled its trading band for interbank dollar/dong transactions on Wednesday, aiming to protect its exports by countering the adverse affects of a strengthening dollar and yuan devaluation, the central bank said. The new band was introduced a day after China, Vietnam's top trading partner, devalued its currency by nearly 2 percent. Dollar/dong transactions can now move in a band of plus or minus 2 percent around a mid-point, which the central bank sets daily. The mid-point has been held at 21,673 dong per dollar since May 7, when the State Bank of Vietnam (SBV) devalued the dong by 1 percent for the second time this year, aiming to spur exports and curb demand for imports that has left it with a hefty trade deficit. The May move met the government's promise to let the dong fall 2 percent this year. "Widening the dollar/dong trading band helps the government adjust exchange rates according to the global economic situation," said Retail Research Manager Nguyen The Minh in Viet … [Read more...] about Vietnam doubles currency trading band to counter yuan fall
The Hanoitimes - The State Bank of Vietnam (SBV) has increased the trading band of Vietnamese dong/US dollar (VND/USD) from +/- 1 percent to +/-2 percent, applicable from August 12. With the average inter-bank VND/USD exchange rate adjusted to 21,673, the ceiling exchange rate is now 22,106 VND/USD and the floor rate is 21,240 VND/USD. This is the third time this year the SBV has adjusted the average inter-bank VND/USD exchange rate. The State Bank of Vietnam has increased the trading band of Vietnamese dong/US dollar (VND/USD) from +/- 1 percent to +/-2 percent. Previously, the SBV raised the average inter-bank rate by 1% from 21,246 VND/USD to 21,458 VND per USD on January 27 and increased it again to 21,673 VND/USD on May 7 to ensure the VND’s stability following movements in domestic and international financial markets. The yuan devaluation by 1.9% on August 11, the biggest loss in two decades, negatively impacted dozens of Asian currencies as well as Vietnam’s … [Read more...] about SBV increases VND/USD trading band to +/-2%
VietNamNet Bridge - Economists have repeatedly urged the State Bank of Vietnam (SBV) to devalue the dong in response to the Chinese yuan devaluation. SBV, in its latest move, shows signs that it will continue stabilizing the dong. “Vietnam needs to devalue the dong promptly, with reference to the Chinese yuan depreciation. For example, if China devalues the yuan by 5 percent, Vietnam needs to devalue the dong by more than 5 percent, possibly 6-7 percent,” said Nguyen Duc Thanh, director of VEPR on Bizlive. According to Thanh, China is the last large economy to devalue its currency. Prior to that, Japan, the EU, Russia and Australia all either had devalued their currencies, or accepted the currencies’ depreciation. This has made the dong, which is closely pegged to the dollar, become stronger against than other currencies. China once followed a policy on stabilizing its currency. However, it has decided to devalue the yuan as well. Regarding the time … [Read more...] about SBV widens forex trading band. What’s next?