Vietnam widens forex trading range

Vietnam on Wednesday applied a 0.5- percent trading range of Vietnamese dong (VND) over U.S. dollar after five years of permitting the local currency to trade 0.25 percent either side of its daily official exchange rate, local media reported.

The new trading range will not have considerable impact on the country's economy, Pioneer newspaper on Wednesday quoted Truong Van Phuoc, director of the Foreign Exchange Management Department under the State Bank of Vietnam, as saying.

The state bank, the country's central bank, is considering the possibility of allowing negotiated foreign exchange rates between VND and U.S. dollar, and eventually floating the rates, he said.

Prices of U.S. dollars in the Vietnamese market will drop in 2007, he said, noting that the interaction between U.S. dollar and other foreign currencies will reflect the future image of U.S. dollar in Vietnam.

The inter-bank foreign exchange rate on Wednesday is one U.S. dollar for 16,096 VND.

Source: Xinhua