Vietnam devalues dong to boost growth

[HANOI] Vietnam's central bank on Wednesday said it would devalue the dong currency in a bid to contain inflation and bolster economic growth.

The State Bank of Vietnam (SBV) will devalue the reference rate by one percent to 21,458 Vietnamese dong per dollar to "control inflation and... push up economic growth", it said in a statement.

The move - the second devaluation in eight months - is "in accordance with the developments of the domestic and international financial markets, creating a solid stability for the forex market", the SBV said.

Economist Vu Dinh Anh from the state-run Economic Finance Institute told AFP the dong had been under mounting pressure on foreign exchange markets late last year.

"The SBV had to proceed with the adjustment to avoid disadvantages against other currencies," he said.

In communist Vietnam, the dollar, along with gold, is considered a safe haven against economic uncertainty.

Vietnam's economy grew 5.98 per cent in 2014 - the highest for three years - while inflation slowed to 4.09 per cent, official figures showed.

The government is targeting economic growth of 6.2 per cent this year.

AFP