Vietnam Dong Drops To Record, Boosting Prospect Of Intervention
Vietnam’s currency fell to a record low, prompting speculation the central bank will intervene to curb the decline.
(Bloomberg) -- Vietnam’s currency fell to a record low, prompting speculation the central bank will intervene to curb the decline.
The dong on Friday weakened beyond its previous all-time low set in 2020 as foreign funds sold the nation’s stocks. The currency has also come under pressure as the Federal Reserve’s interest-rate hikes bolsters the dollar.
The currency’s weakness may be capped at current levels as “the central bank has said it is willing to sell dollars to stabilize the dong,” said Manh Hung, chief analyst of TVI, a Hanoi-based equity research and investment firm.
Emerging markets are grappling with steep declines in their currencies even as authorities push back against a strong dollar. The Philippine peso touched another record low on Friday while the yuan weakened past the key 7 per dollar level.
The State Bank of Vietnam is willing to sell foreign currencies to meet local market demand, Governor Nguyen Thi Hong reiterated in August.
The dong dropped as much as 0.16% to 23,650 per dollar on Friday, the lowest since at least 1993, according to data compiled by Bloomberg. Foreign funds sold a net $46.3 million of the nation’s stocks this month.
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