Vietnam will engineer a decline in the dong of as much as 1 percent this year to support exports, a Bloomberg news agency’s report Monday quoted Deputy Prime Minister Nguyen Sinh Hung as saying.
Intervention by State Bank of Vietnam, the country’s central bank, has led to a depreciation of about 1 percent in each of the past three years, even as foreign investment drove faster economic growth.
The currency has dropped 0.4 percent this year, while the Indian rupee gained 8.6 percent, the Philippine peso climbed 6.2 percent and the Thai baht rose 2.5 percent.
“We are making the decision to depreciate it a little bit to ensure our exports because there is a good inflow of dollars,” Hung said in an interview Sunday while attending the World Economic Forum in Singapore.
“Our concern is the appreciation of the Vietnam dong.”
HSBC Holdings Plc., Europe's biggest bank by market value, this month said the currency would appreciate as foreign investment inflows increase and policy makers try to stem inflation. A stronger dong would make imports cheaper and cool growth in exports of crude oil, textiles and furniture.
Source: Thanh Nien
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