The Vietnamese dong is worth relatively less due to several factors including inflation, economic instability, and limited convertibility in international markets. Additionally, Vietnam’s lower GDP per capita contributes to a lower value in comparison to other stronger currencies.
The Vietnamese dong (VND) has a relatively low value compared to many other currencies due to a combination of factors including inflation, economic instability, limited convertibility in international markets, and Vietnam’s lower GDP per capita. These factors have influenced the exchange rate of the dong and its overall value on the global market.
One significant factor contributing to the low value of the Vietnamese dong is inflation. Vietnam has experienced periods of high inflation in the past, which have eroded the purchasing power of its currency. The government has implemented measures to control inflation, but it remains a challenge.
The economic instability in Vietnam also plays a role in the dong’s value. The country has undergone significant economic transformation in recent decades, transitioning from a centrally planned economy to a more market-oriented one. However, this transition has brought about challenges such as corruption, inefficiencies, and a lack of transparency, which can affect investor confidence and put downward pressure on the currency’s value.
Limited convertibility of the Vietnamese dong in international markets is another factor. The government maintains strict control over the currency’s exchange rate and restricts its convertibility outside of Vietnam. This control limits the availability and liquidity of the dong in global markets, thus impacting its overall value.
Interestingly, the Vietnamese dong is currently non-convertible outside of Vietnam, making it challenging to acquire outside the country. This restriction is in place to maintain stability and control over the currency. However, it also limits its exposure and usage in international trade and finance.
Despite its relatively low value, the Vietnamese dong has remained stable within its domestic economy. The government has taken steps to manage the exchange rate and implement monetary policies to maintain stability, which has helped support economic growth and investment in the country.
To provide some insight from a well-known resource, The Economist once stated, “The Vietnamese dong may be an oddity among world currencies, but its weakness is partly explained by its popularity. It’s a useful safety valve. When Vietnam falls into an economic hole, money races out of the dong, pushing its value down. When times are good, inflows push it up. In other words, the dong takes the strain rather than the economy.”
Interesting facts about the Vietnamese dong:
- The Vietnamese dong has a long history and can be traced back to the 1945 currency reform in Vietnam.
- The dong is issued by the State Bank of Vietnam, the country’s central bank.
- The currency code for the Vietnamese dong is VND.
- The Vietnamese dong has several denominations, including banknotes of 1,000, 2,000, 5,000, 10,000, 20,000, 50,000, 100,000, 200,000, and 500,000 dong.
- Interestingly, due to the low value of the currency, it is common to see large stacks of banknotes being used for everyday transactions in Vietnam.
To provide a comprehensive overview of the Vietnamese dong’s value and its factors, the following table illustrates the historical exchange rates against the US dollar:
Year | Exchange Rate (1 USD to VND)
2010 | 20,905
2012 | 21,041
2014 | 21,271
2016 | 22,705
2018 | 23,382
2020 | 23,215
Please note that the exchange rates provided in the table are for illustrative purposes only and may not reflect the current rates.
This video contains the answer to your query
The YouTube video titled “Will the Vietnamese Dong Revalue in 2023?” discusses the possibility of the Vietnamese Dong revaluing but ultimately concludes that it is unlikely. The video points out the Dong’s history of inflation and economic instability, as well as its current low value as the third least valuable currency in the world. Furthermore, the low value of the Dong benefits Vietnam’s export industry. The video advises against investing in the Dong and highlights recent news that suggests a further decrease in its value. The speaker recommends holding USD instead and cautions against speculative investments, advocating for investing in quality assets for the long term.
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The dong has been devalued five times since 2014 with the aim of boosting exports and ensuring currency stability to control high inflation. The value of the currency is influenced by Vietnam’s trade flows, foreign currency reserves, economic growth, interest rates and inflation, as well as US monetary policy.
As the government continues to print more money, the supply is there, but it has no value than other global currencies. This causes depreciation of the currency, which is why you can exchange very little money in Vietnam and have so much.
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Check the currency rates against all the world currencies here. The currency converter below is easy to use and the currency rates are updated frequently.
The current converted value is equivalent to about 21.4 USD. This is a banknote easily confused with much lower denominations: 20,000 VND. So, if you are still not good at using Vietnamese currency, you should spend some extra attention when using two par value of 20,000 VND and 500,000 VND.