Will vietnamese dong revalue 2011-2012
forex trading outlook today - Will vietnamese dong revalue 2011-2012 :
The process of currency revaluation refers to an active decision of any government to increase or decrease the currency value in relation to other currencies. Revaluation is characteristic of fixed currencies, wherein the currency is pegged to another currency.
The official currency of Vietnam, the Dong is divided into 10 Hao, which are subsequently divided into 10 Xu. However, the Hao and the Xu are no longer issued and hence insignificant. The Dong was revalued in the mid 80's with the new Dong rising to equal 10 old Dongs.
By allowing the VND to revaluate against the Dollar, prices of industrial input materials including fuel and steel billet can be checked, and promote domestic production with a greater domestic supply.
A strong currency would imply lower VND deposit interest rates too. It will help attract investment too. The State Bank of Vietnam widened the USD/VND trading band from ±0.25% to ±0.5% in 2007 to tackle the strong inflows of foreign currency that had caused an appreciation of the VND.
If you are looking at the Vietnamese Dong for investment, there is no better time than right now. The Dong has been under pressure for sometime now but the overall picture has remained compelling.
With a young population, which boasts of 90% literates, labor cheaper than China and a variety of raw material exports - the Vietnamese market is a good option for investors who are prepared to deal with slight volatilities.
With the World Trade Organization accepting Vietnam as a member, it can now compete on an equal footing with other export-oriented economies. Article Source: http://EzineArticles.com/4463923