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Vietnam Devalues Dong by 7%, Risking Faster Inflation

Vietnam devalued the dong by about 7 percent, the most since at least 1993, risking faster inflation to curb the nation’s trade deficit and narrow the gap between official and black-market exchange rates.

The dong slumped to as weak as 20,893 per dollar, compared with 19,498 yesterday, and was at 20,875 at 4:45 p.m. in Hanoi. The State Bank of Vietnam fixed the reference rate for the currency at 20,693 versus 18,932 yesterday, or 8.5 percent weaker. The trading band for the currency was narrowed to 1 percent on either side of the rate from 3 percent previously.