Business

Tuesday March 24, 2009

Vietnam allows currency to weaken more quickly


HANOI, Vietnam (AP) - Vietnam has widened its daily exchange-rate trading band to plus or minus 5 percent from 3 percent against the U.S. dollar, effectively allowing the country's currency to depreciate more quickly and helping boost exports, the state bank and officials said Tuesday.

The move by the governor of the state bank or the central bank, which took effect on Tuesday, aimed at "enhancing the flexibility of the economy," the state bank said on its Web site.

The decision "will help banks and companies be proactive in preparations of their production plans for 2009," the central bank said.

The official exchange rate is 16,980 dong to the dollar, and the dong has weakened about 2 percent since the start of the year.

Economist Pham Chi Lan said the widening of daily exchange-rate trading band will help boost the country's exports which are affected by the global economic recession.

"It certainly help boost exports and thus helping ease pressure on laying off workers in exported industries such as textile, garment, furniture and seafood," she said.

Vietnam exported goods and services worth US$13.5 billion in the first quarter, posting and increase of 2.4 percent against the same period of last year which is much lower the export growth of 29.5 percent for the whole year of 2008, according to the General Statistics Office.


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