What’s brewing in Vietnam? The country’s currency has hit a record low, after a government advisor warned of the potential for a foreign currency liquidity shock according to Bloomberg.
“The most significant macro financial risk that Vietnam may face is monetary risk,” Le Xuan Nghia, vice chairman of Vietnam’s National Financial Supervision Commission, said in Hanoi yesterday. “The current-account deficit is still high, while the exchange-rate mechanism is less flexible. If the country isn’t careful, it may have to cope with a shock of foreign-currency liquidity.”
The dong fell 0.9 per cent, adding to yesterday’s 1.1 per cent loss, to trade at 19,490 per dollar as of 2:35 p.m. in Hanoi, according to data compiled by Bloomberg. That was its weakest level since data began in 1993. The central bank kept the reference rate at 18,932 today, unchanged from yesterday.
In the so-called black market, the dong weakened to 19,510 as of 2:25 p.m., from 19,445 yesterday at money changers in Ho Chi Minh City, according to a telephone-information service run by the state-owned Vietnam Posts & Telecommunications.
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