Since July 2021, the Vietnamese dong has strengthened by 1.3 per cent against the US dollar and the unit has averaged VND23,930 per US dollar in the year-to-October.

Weaker foreign direct investment inflow on the back of the Covid-19 pandemic and a likely preference by the central bank for a weaker Vietnamese dong to support export competitiveness would be key drivers of dong weakness over the near term,

Though the unofficial value of the VND has now fallen about 3 percent against the USD, the rate is still a smaller depreciation than that seen by most of Vietnam’s regional peers and is expected to stabilise around that level.