Bloomberg Business, 12 August 2015. Vietnam Widens Dong’s Trading Band After China Devalues Yuan, by .

An edited extract of the original article appears below.

Vietnam widened the dong’s trading band on Wednesday to allow the currency to weaken after China, its biggest trading partner, devalued the yuan.

The dong can now move as much as 2 percent on either side of a fixing set by the monetary authority, from 1 percent previously, the central bank said in a statement. The dong weakened 1 percent to 22,040 a dollar as of 2:16 p.m. in Hanoi. The central bank set the reference rate at 21,673, unchanged from the previous day.

The move follows two devaluations of the dong, by 1 percent each, in January and May. The action today is “to help the dong be more flexible” and maintain competitiveness’’ of Vietnamese products, as the yuan devaluation will have a negative economic impact, the State Bank of Vietnam said. Export growth slowed to 9.5 percent in the first seven months of 2015, compared with 14.1 percent in the year-earlier period…

 

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