Vietnamese dong rises on intervention, yet remains Asean’s worst performer

[HO CHI MINH CITY] The Vietnamese dong rose after the State Bank of Vietnam (SBV) began selling US dollars to credit institutions on Monday (Aug 25) through so-called “cancellable” forward contracts, in an effort to stabilise the foreign exchange (FX) market.

While the regulator’s move is viewed as a measure to ease the upward pressure on the USD/VND exchange rate, analysts expect these gains to be limited, with the dong continuing to underperform against major and regional currencies.

“I think the latest move by SBV... should slow the pace of Vietnamese dong depreciation, but is unlikely to change the path and direction,” noted Michael Wan, senior currency analyst at MUFG Bank.