Vietnamese Dong Attracts International Attention

Despite a surging economy, Vietnam’s currency, the Dong, has managed to escape the attention of international traders and investors.  Last year, Vietnam registered the strongest economic growth in Southeast Asia, at 7.7%, and is projected to grow by over 8% this year.  However, due to a devaluation program maintained by the government to support the Vietnamese export sector, the Dong has remained low.  In addition, the government does not allow speculators to buy Vietnamese currency unless it is being used for a specific purpose, typically investment.  As a result, the market for currency derivatives is beginning to take-off in Vietnam, as speculators seek a means of capturing some of the strength in Vietnam’s economy that is sure to lift its currency.  The International Herald Tribune reports:

Vietnam this year ended a decade-long policy of “managed devaluation” that caused the dong to weaken 30 percent. The central bank will “keep the dong stable, in a flexible manner, so that it can help our exports,” said one analyst.

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