Vietnam begins setting central rate for VND-USD transactions in de-dollarization bid, Tuoi Tre News, 4 January 2016.

An edited extract of the original article appears below.

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The State Bank of Vietnam (SBV) on Monday set the daily central rate for the dong/dollar at VND21,896, the very first day it adopted a new management mechanism in the hope of giving more flexibility to the foreign exchange rate.

The new policy, unveiled by the central bank late last year and officially taking effect on Monday, replaced a fixed VND-USD rate, which the SBV adjusted only occasionally in the past.

Monday’s central rate, VND21,896, is VND6 higher than the erstwhile fixed rate of VND21,890.

With the VND-USD trading band kept at three percent, banks in Vietnam are allowed to trade the greenback within a range of VND21,239 to VND22,553 until a new rate is set tomorrow.

SBV Governor Nguyen Van Binh said late December that the fixed rate would be replaced by the central rate to manage the forex market more flexibly, at a time when people are still hoarding the foreign currency, going against the central bank’s de-dollarization plan…

 

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