The State Bank of Vietnam earlier this month bought a huge volume of U.S. dollars in an effort to prevent the greenback from devaluing against the local currency, the Vietnam dong, as it tried to keep its word on stabilizing the dong value to support local exporters
Truong Van Phuoc, deputy chairman of the National Financial Supervisory Commission, said that hoarding the U.S. dollar will not be a trend as the central bank has devalued the dong by one percent
The recent devaluation of the Vietnam dong is a proactive move of the State Bank of Vietnam to support exports in the last six months of 2014, thereby supporting economic growth
It is an unexpected move as the central bank had held the rate steadily for over one month after the devaluation in late June
The latest pressure on the foreign exchange rate between the Vietnam dong and the US dollar days is largely dominated by psychological factors, said the central bank’s deputy governor, Le Minh Hung