SBV's policy measures on devaluing the Vietnamese dong and widening the trading band in August 2015

Abstract

After one week launching a policy of widening trading band from 1% to 2%, the State Bank of Vietnam (SBV) continue to devalue the dong by 1% and increase the trading band from 2% to3%. This decision by SBV is highly appreciated by most economic experts and policy makers both domestically and internationally, including experts from well-known financial organizations such as International Monetary Fund (IMF), World Bank (WB), Standard Chartered bank... Based on the academic theory on exchange rate and facts from recent developments in domestic and international monetary regime, the authors argue adjustment is necessary, as describe in the following section