Vietnam'S Central Bank Announces Depreciation Of The Dong Shield Against The US Dollar By 3%

With the slowdown of economic growth in Southeast Asia, Vietnam's import and export trade deficit has increased, and the Central Bank of Vietnam has announced that it will depreciate the Dong Dong against the US dollar by 3%, so as to help exports.

According to the website of Vietnam central bank, the US dollar's exchange rate against the Vietnamese shield was raised from 16989 to 16494 yesterday.

Nguyen Quang Huy, director of the foreign exchange trading stabilization department, said that the flexible monetary policy that allowed currencies to fluctuate 3% times a day has not changed.

Due to the slowdown in global economic growth, the market has reduced demand for clothing and coffee products produced by Vietnam. Meanwhile, the devaluation rate of neighboring countries is faster than Vietnam, making Vietnam's exports less competitive, which directly led to a slowdown in Vietnam's export growth in the past three months.

This year, the Dong shield has fallen by 5.5% against the US dollar, but by comparison, the India rupee has fallen by 18% against the US dollar, the Indonesia rupee has fallen by 14% against the US dollar, and the Philippines Peso has fallen 13% against the US dollar.

It is necessary for the government to devalue the Dong Dong against the US dollar in order to increase exports.

The chairman of the Vietnam bond association, director of the interbank monetary and debt Trading Association, made the above statement, which is the second largest asset lending organization in Vietnam.

He said the currencies of Vietnam's neighboring countries have fallen sharply against the US dollar, but the Dong shield has not been able to fall so much against the US dollar.

According to data from Vietnam's agriculture and rural development bank in Hanoi, the US dollar traded against the Dong shield at 17300-17450 p.m. this afternoon, which is Vietnam's largest asset lending institution. 3

To ensure stability, the Vietnamese central bank said on its website today that the new guiding exchange rate helps to increase Vietnam's exports, narrow its trade deficit and ensure trade balance.

In the black market of Vietnam's currency trading in Hanoi, the US dollar traded against Vietnam shield was 17270-17350.

Since 1994, the Vietnamese shield has risen by 35% against the US dollar. Until then, the Central Bank of Vietnam has lowered its currency exchange rate every year.

The Vietnam VN stock index fell 0.6% to 302.19 points, the lowest level in nearly a year.

The index has fallen 67% this year, making it the worst performing market in Asia.

Yesterday, the government said in a statement that Vietnam's GDP growth is expected to reach 6.2% in 08 years, up from 8.5% last year.

According to the forecast figures provided by the government today, the Vietnam trade deficit is expected to increase from $14 billion 100 million to $17 billion.

Credit Suisse data released in December 17th showed that Vietnam's current-account deficit will increase to $12 billion 100 million, or 12.3% of GDP, by 2009, which is expected to reach $10 billion 500 million this year, accounting for GDP11.7%.

Yuichi Izumi, an economist at Nomura Securities in Tokyo, said the Vietnam shield will face downward pressure due to the current account deficit, and the central bank will guide the Dong shield to continue to fall in support of Vietnam's exports.