Vietnam currency falls to historic low

By Dat Nguyen April 24, 2019 | 06:14 am PT

An employee counts U.S. dollar and Vietnamese dong at a bank in Ho Chi Minh City, Vietnam. Photo by VnExpress/Anh Tu

The Vietnamese dong has fallen to its lowest level ever against the U.S. dollar, and banks are fixing their exchange rates accordingly.

On Tuesday the State Bank of Vietnam set the reference rate at VND23,004 and lowered it to VND23,013 the next day.

The Vietnamese currency has lost VND179 to the dollar, or 0.78 percent, since the beginning of this year.

On Wednesday Vietcombank sold the greenback at VND23,270, down VND5 from Tuesday, while Vietinbank sold at VND23,278. Eximbank sold its dollar at VND23,260, unchanged from Monday.

On the free market, there is a difference of around VND15 to a dollar with banks.

Experts said it is too early to say if the exchange rate would remain stable through this year.

Economist Nguyen Tri Hieu told VnExpress International the U.S. Federal Reserve’s interest rate is only one of the factors affecting the exchange rate, and others need to be taken into account such as the depreciation of the Chinese yuan and changes in the global financial market.

"If China decides to devalue its currency, Vietnam might have to do the same to reduce the influx of Chinese goods into the country."

Last year the dong fell by 1.6 percent against the dollar as the Fed hiked rates four times.