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Vietnamese dong falls to limit of it trading band for first time
THE Vietnamese dong has fallen to the limit of its trading band for the first time, reflecting further pressure to weaken after three devaluations this year, reports Bloomberg.
The currency fell as much as 0.07 per cent to 22,547 per dollar in Hanoi, diverging from the State Bank of Vietnam's daily reference rate of 21,890 by the maximum three per cent that's permitted.
The official rate has been kept steady since it was last cut on August 19, when the trading band was also widened from two per cent. The monetary authority had doubled the scope for fluctuations only a week earlier, providing room for depreciation as a devaluation of China's yuan pulled exchange rates down in Asia.
The yuan has since lost further ground, sinking to a four-year low in Shanghai in the past week, as the first US interest-rate increase since 2006 supported the dollar.
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.
The currency fell as much as 0.07 per cent to 22,547 per dollar in Hanoi, diverging from the State Bank of Vietnam's daily reference rate of 21,890 by the maximum three per cent that's permitted.
The official rate has been kept steady since it was last cut on August 19, when the trading band was also widened from two per cent. The monetary authority had doubled the scope for fluctuations only a week earlier, providing room for depreciation as a devaluation of China's yuan pulled exchange rates down in Asia.
The yuan has since lost further ground, sinking to a four-year low in Shanghai in the past week, as the first US interest-rate increase since 2006 supported the dollar.
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.
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