Vietnam devalues currency
Vietnam devalued its currency today by 8.5% as the Communist-ruled country fights double-digit inflation and a widening trade deficit.
The State Bank of Vietnam said in a statement on its website that the US dollar will buy 20,693 Vietnamese dong compared with the previous rate of 18,932 dong per dollar.
The statement also said the bank has narrowed the band in which the dong can move from 3% to 1%.
Pham Chi Lan, a former government economic adviser, said the authorities had held the dong at an artificially high level for too long, but warned other steps must be taken to overcome a growing trade deficit and high inflation.
“Curbing inflation depends on controlling state investment and the state-owned economic sector, which needs to improve efficiency,” she said.
Vietnam, one of the fastest-growing economies in Asia, has been plagued by a string of recent woes.
The country’s inflation hit nearly 12% and the trade deficit stood at 12.4 billion US dollars last year, according to government figures.
