(Bloomberg) — Vietnam’s currency fell to a record low against the dollar after the central bank set the fixing lower.
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The dong (VND=X) dropped 0.1% to 25,485 per dollar on Monday, declining beyond its previous all-time low set in May.
Emerging-market currencies have come under pressure after Donald Trump’s victory boosted the dollar, with trade-reliant nations being particularly vulnerable on worries over US tariffs. A hawkish Federal Reserve is bolstering the dollar’s strength, with the South Korean won sliding to the lowest since 2009 this month.
“The dong dropped on rising demand for the US dollar ahead of Trump officially taking office next month,” said Tran Tuan Minh, chief executive of TVI, a Hanoi-based equity research and investment firm. The local currency could weaken further as companies need more dollars at the year-end to pay their contracts, according to Minh.
The State Bank of Vietnam reiterated last month that it’s willing to sell US dollars to keep the dong stable.
The central bank weakened its daily reference rate for the currency to a record-low of 24,327 dong per dollar today, according to data compiled by Bloomberg. The dong is allowed to trade as much as 5% on either side of the reference rate.
“We expect the US dollar to continue rising for a while and that would prompt the central bank to step in to intervene with more dollar sales to calm the market,” Minh added.
The dong fell to as low as 25,850 per dollar in the so-called black market on Monday morning, state radio Voice of Vietnam reported on its website, without citing a source.
—With assistance from Linh Vu Nguyen and Malavika Kaur Makol.
(Updates with new dong record and analyst comment)
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