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Central bank sets official dong at record low
Vietnam’s central bank set the daily official dong exchange rate Wednesday at a record low of VND16,519 per dollar, reflecting the continued pressure on the currency from rising inflation and imports.
Last Friday the central bank doubled the dollar/dong trading band to +/- 2 percent, allowing more room for banks to meet corporate dollar demand.
Vietnam has been hard hit by surging imports costs from record high oil and raw materials prices to fuel its fast-growing economy.
Inflation has been running in double digits for eight months and the trade deficit nearly tripled in the first half from a year earlier.
The official rate meant Vietnam has allowed its non-convertible dong to fall 2.45 percent against the dollar so far this year.
The government had said it would allow the dong to rise or fall 2 percent for the whole of 2008.
A large part of that move was taken up by a one-off 2 percent drop in the official rate on June 11.
Authorities called it an adjustment, while economists called it an effective devaluation.
Following the official rate, the dong dropped to 16,847/16,849 per dollar in interbank trading, pushing to the low end of the daily permissible range.
On black markets though, the dong changed hands at 17,600 per dollar, more than 6 percent below the official rate and about 4 percent below interbank rates.
Thanhnien
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