(RTTNews) - Thursday, the State Bank of Vietnam devalued its currency by 3% as the Vietnam's inflation slowed sharply in December. The monetary authority devalued the currency every year since 1995.
The General Statistical Office of Vietnam reported today that the consumer price index or CPI rose at a pace of 19.89% year-on-year in December. Inflation slowed from 24.2% recorded in November. Month-on-month, consumer prices were down 0.68% in December. In November, prices were down 0.76%. The average inflation rate for 2008 was 22.97%, the report showed, surging from 8.3% logged for 2007.
Today, the central bank fixed the rate at 16,989 per dollar, versus 16,494 yesterday. The currency is allowed to trade at 3 percent on either side of the fixed rate. This is the second time the central bank has made a significant increase in the exchange rate, after raising it by 2% in June.
The State Bank of Vietnam has allowed the currency to weaken 5.7 percent against the dollar this year, compared with a 29 percent slide in the Korean won and a 13 percent slump in the Philippine peso.
The Vietnamese dong is facing downward pressure due to the current-account deficit. Vietnam's trade deficit widened 56 percent to $16.9 billion in the first 11 months of the year, according to government data.
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