Vietnam dong flat, shares ease despite global rebound
Wednesday, October 26, 2022, 16:14 GMT+7
The Vietnamese dong (VND) was flat against the dollar in early trading on Wednesday, a day after the central bank raised its policy rate by 100 basis points.
At 03:00 GMT, the dong traded at 24.840 against the dollar, versus its previous close of 24.840. So far this year, the dong has fallen 9%, following the U.S. Federal Reserve's rate hikes to tame inflation.
Vietnam's benchmark index .VNI opened down 0.3% to 994, despite gains on Wall Street amid hopes for a slower pace of U.S. monetary tightening.
Fitch Solutions said on Wednesday further rate hikes by Vietnam's central bank were likely, as global credit conditions continue tightening and as domestic inflation looks set to accelerate, a view shared by Capital Economics in a note on Tuesday.
Fitch Solutions said it expected Vietnam's benchmark policy rate to rise from 6.00% currently to 7.00% by the end of 2022, before peaking at 7.50% in 2023.
The central bank on Oct. 17 widened the exchange rate trading band to 5.0% from 3.0%, following a sharp fall in the dong.
