John Boudreau/Bloomberg.com
The Vietnamese dong fell as much as 0.07 percent to 22,547 per dollar in Hanoi, diverging from the State Bank of Vietnam’s daily reference rate of 21,890 by the maximum 3 percent that’s permitted. The official rate has been kept steady since it was last cut on Aug. 19, when the trading band was also widened from 2 percent. While the dong has weakened 5.1 percent so far this year, it has proven more resilient than the currencies of Southeast Asia’s five biggest economies. Supporting the exchange rate has come at a cost to the nation’s foreign-currency reserves, which tumbled by $6.7 billion to $31 billion in the third quarter.
This file photo taken on November 26, 2009 shows a Vietamese commercial bank employee counting Vietnamese dong notes at a branch in Hanoi. The dong fell another .07 percent. (Photo: Hoang Dinh Nam/AFP/Getty Images)
The State Bank of Vietnam is not required to intervene when the dong hits the limit of its trading band, though it has repeatedly said it is willing to do so to keep the currency stable. Financial institutions that trade outside of the permitted range can be fined. The monetary authority wasn’t immediately available on Wednesday morning for comment on the nation’s exchange rate.
Malaysia’s ringgit tumbled 19 percent versus the greenback this year, Asia’s worst performer. The Philippine peso fell 5.3 percent, Thailand’s baht weakened 8.8 percent and Indonesia’s rupiah declined 9.2 percent, according to data compiled by Bloomberg. Strengthening demand for dollars led to developing nations including Argentina, Azerbaijan and Kazakhstan scrapping currency controls and adopting freely floating exchange rates.
