Vietnam Devalues Dong as U.S. Dollar Rises
January 7, 2015
Vietnam’s central bank on Wednesday devalued the dong against the U.S. dollar by 1%, a move that may help the Southeast Asian country’s exports become more competitive with regional peers as the dollar strengthens.
The central bank said the rate adjustment was in line with the government’s development plan for 2015. The government targets GDP growth of 6.2% and is aiming to keep inflation at 5% for this year. The country recorded GDP growth of 5.98% and inflation of 1.84% last year.
“The central bank has the responsibility to take an active and flexible monetary policy, which, along with fiscal policy, will aim to keep inflation at a targeted level and maintain macroeconomic stability while supporting an appropriate growth,” the State Bank of Vietnam said.
Wednesday’s devaluation is the first since June last year, when the central bank devalued the dong by 1%. ANZ said it expects more devaluation toward the end of the year and that its foreign exchange strategists forecast the exchange rate may reach 22,050 dong by December.