Business · Vietnam Bureau
Vietnam's dong weakens as reference exchange rate declines
Vietnam's reference exchange rate fell on November 3, extending recent losses in the dong's value. The State Bank of Vietnam set trading bands that allow commercial banks significant flexibility in setting rates.
LSN Vietnam ·
The reference exchange rate between the Vietnamese dong and US dollar declined on November 3, continuing a downward trend observed throughout late October. The State Bank of Vietnam maintains a trading band of ±5% around the official reference rate, establishing parameters within which commercial banks operate.
Under the current trading framework, the ceiling rate applicable to commercial banks stood at 26,912 VND/USD, while the floor rate was set at 24,348 VND/USD. This band system allows the dong to fluctuate within prescribed limits while providing stability to Vietnam's foreign exchange market.
The recent weakness follows earlier declines in the reference rate, which fell 7 VND on October 30 and 6 VND at the beginning of the week. The persistent downward movement reflects ongoing pressures on the dong in the foreign exchange market.
Vietnam's central bank uses the reference exchange rate as a key tool for managing currency stability and guiding commercial bank operations. The trading band mechanism helps prevent excessive volatility while allowing market forces to influence exchange rate movements within defined boundaries.