Last week it was the Chinese yuan this week Vietnam has devalued its currency by one percent in a clear reaction to the dilution of the Chinese yuan and a possible US interest rate increase.
The central bank-set reference rate weakened to 21,890 dong to the US dollar and the trading band at which the dong could be traded above or below was widened to three percent from two percent, the State Bank of Vietnam said in a statement earlier today.
As costs in China have crept up numerous manufacturers have relocated in recent years out of China and into Vietnam and the calibration is an obvious move to keep the competitive margins in place.
Vietnam's central bank said the latest move aims at ensuring stability for the dong and competitiveness of Vietnamese products.
