Vietnam Likely to Devalue its Currency

A leading international bank predicts Vietnam will devalue its currency 4% by the end of 2009 because the government hoping to boost exports to help improve economic growth.  The Vietnamese dong is currently trading at about 17,825 per dollar whereas the exchange rate was in the 16,000 range two years ago.  Now it is expected to reach 18,500 by year-end, according to ANZ bank.

Vietnam is targeting economic growth of at least 5% this year and plans to revive exports to do so.  The State Bank of Vietnam let the currency weaken 8.5 %. last year.  Meanwhile, inflation has continued a year-long downward trend and slowed to 2%, but analysts expect inflation to accelerate again soon.

More on Vietnam’s devalued currency

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