The Rising Pressure On The Dong

The State Bank of Vietnam (SBV) will continue to pursue a policy of depreciation of the dong currency in 2006, although we believe that the unit will come under increasing pressure to appreciate. Indeed, the dong's pace of depreciation against the US dollar has slowed in recent years, and was only 0.91% in 2005, compared with 0.83% in 2004, 1.54% in 2003, 2.05% in 2002, and 3.77% in 2001. The weakening of the dong generally suits Vietnam, which is keen to boost its exports to further economic expansion. However, the problem with a weaker dong is that it contributes to

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