Devaluation Risk Rises in Vietnam as Dollar Rates Cut to Zero
- Dong within 0.2% of lower end of band every day this week
- Depreciation likely early next year: National Citizen Bank
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Vietnam’s dong fell toward the brink of its permitted trading range as a ban on interest payments on dollar deposits held onshore failed to cool speculation the currency is poised for its fourth devaluation in a year.
The State Bank of Vietnam cut the dollar deposit rate cap to zero from 0.25 percent for individual accounts, effective Friday, it said in a statement on its website late Thursday. The dong fell 0.14 percent this week to 22,532 a dollar as of 9:57 a.m. in Hanoi, prices from local banks show. The currency, which can trade as much as 3 percent either side of a daily fixing, has declined to within 0.2 percent of the lower end of the band every day this week.