The past five years have not been good to businesses looking to export products and services to Vietnam, but companies sourcing products from Vietnam have been rewarded handsomely and, for them, 2012 will be another good year. That’s because of a steep and steady decline in Vietnamese currency.
Nearly five years ago, in May 2007, Vietnam’s currency was pegged to the US dollar, with which you could buy 15,433 Vietnamese dong. Since then, the government has devalued the dong multiple times, and 2011 ended with the dong 36% lower at almost 21,000 to the dollar.
For 2012 the government anticipates another decline of at least 5% as Vietnam continues efforts to get inflation down from nearly 19% to a single digit. That is likely to continue encouraging exports out of Vietnam and discourage importers. The continued decline in the dong also makes Vietnam a more attractive destination for tourists.