Vietnam close to yuan rout amid dipping currency
The tremors of the yuan’s 4.7 percent drop have started to affect its neighboring countries.
China's problem with dipping currency would have been stabilized after arm-twisting by the central bank, which urged commercial lenders to stabilize the market and avoid " herd behavior".
The tremors of the yuan's 4.7 percent drop have started to affect its neighboring countries.
Traders betting on faster depreciation saw Vietnamese dong has been steadily moving closer to the edge of its 3 percent daily trading against the dollar for last two weeks.
The market rate saw a dip of 2.7 percent as State Bank of Vietnam brought the official rate 1.1 percent lower this year.
Just like Yuan, dong is dependent on the dollar. The current market predicts a further decline in Vietnam's currency.
Earlier in August 2015, a day later after China's shock to the global markets with the alarming devaluation of yuan. Vietnam widened the dong's trading band, ending the year with a 3 percent depreciation in the official exchange rate and 5.1 percent drop in the market rate.
The yuan has been the worst performer of 12 major Asian currencies against the dollar in the past month.
Vietnam is reluctant to counter the depreciating currency this time around with consumer price index blowing past the central bank's 4 percent target rate for two months in a row.
Vietnam may be forced to devastatingly high rates amid US central bank's determination of not overheating a strong economy.