Re: Vietnam
Posted: Fri Jun 20, 2014 7:03 pm
Vietnam devalues dong
HANOI: Vietnam devalued its currency for the first time in a year in what analysts said was an effort to prop up its economy without having to reduce policy rates and stoke inflationary pressures.
The country announced late on Wednesday it would devalue the dong to help exports, its main economic driver, in a widely expected move that could mitigate pressure from an intractable row with its biggest trade partner, China.
The State Bank of Vietnam (SBV) lowered the midpoint rate for trading its dong currency on the interbank market by one per cent, or to 21,246 per dollar, on the assumption Vietnam can control inflation in the second half of the year.
The target is to keep inflation at between six and seven per cent this year and next, against 6.6 per cent last year.
“In the context inflation is being kept at a low level, in order to support exports in the last six months, the State Bank proactively adjusts the exchange rate,” the SBV said.
Although Vietnam’s economy grew 5.42 per cent last year, it remains fragile, dependent on external markets and still grappling with toxic debt, bankruptcies and weak retail spending. It has targeted 5.8 per cent growth this year.
Source: Reuters
HANOI: Vietnam devalued its currency for the first time in a year in what analysts said was an effort to prop up its economy without having to reduce policy rates and stoke inflationary pressures.
The country announced late on Wednesday it would devalue the dong to help exports, its main economic driver, in a widely expected move that could mitigate pressure from an intractable row with its biggest trade partner, China.
The State Bank of Vietnam (SBV) lowered the midpoint rate for trading its dong currency on the interbank market by one per cent, or to 21,246 per dollar, on the assumption Vietnam can control inflation in the second half of the year.
The target is to keep inflation at between six and seven per cent this year and next, against 6.6 per cent last year.
“In the context inflation is being kept at a low level, in order to support exports in the last six months, the State Bank proactively adjusts the exchange rate,” the SBV said.
Although Vietnam’s economy grew 5.42 per cent last year, it remains fragile, dependent on external markets and still grappling with toxic debt, bankruptcies and weak retail spending. It has targeted 5.8 per cent growth this year.
Source: Reuters