barrons-Vietnam followed China’s footsteps a week after its larger neighbor devalued its currency.
The State Bank of Vietnam guided the dong fix rate lower by 1% at 21,890 dong per dollar this morning.
In addition, the Vietnamese central bank widened the dong’s trading band against the dollar to 3% from 2%.
Just like China, Vietnam publishes a guided rate every morning and the currency market is allowed to trade within a certain percentage limit.
This is the third time this year Vietnam guided dong lower. It conducted similar operations in January and May.
Vietnam is the only bright market in terms of exports. See my August 5 blog “Why Vietnam Beat Its ASEAN Neighbors In Manufacturing“.
The Market Vectors Vietnam ETF (VNM) has fallen 4.5% since China’s operation last week.