Associated Press
After China devalued their yuan, Vietnam allowed suit by weakening the dong by least 1 percent.
The rate weakened to 21,890 dong to the U.S. dollar and the trading band within which the dong can be traded was widened to 3 percent from 2 percent. Economist Tran Du Lich said the central bank’s decision to widen the band to 3 percent was necessary in the current situation. He said a possible Fed rate increase later this year would weaken the appeal of the dong even more.
A customer at Joint-Stock Commercial Bank for Foreign Trade of Vietnam makes a deposit of dong bank notes in Hanoi, Vietnam. This is the 3rd time this year Vietnam has devalued the dong. (Photo: Justin Mott/Bloomberg via Getty Images)
Last week, China sharply devalued the yuan, which the government said was part of reforms meant to make its exchange rate more market-oriented. Two-way trade between Vietnam and China was $59 billion last year, in which Vietnam recorded a deficit of $29 billion.
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http://news.yahoo.com/vietnam-devalues-dong-1-pct-025223457.html
