Sandy Ingram
Here's why Vietnam's currency keeps floating downward compared to the US dollar. According to Reuters the Vietnamese Dong has experienced depreciation against the US dollar due to a combination of global and domestic factors.
1. The strengthening of the U.S. dollar.
2. Interest rate differentials. Vietnam's Central Bank has maintained lower interest rates to stimulate economic growth.
3. Trade and investment flows. Fluctuations in Vietnam's trade balance and foreign direct investment can influence currency values.
4. Inflationary pressures. Higher domestic inflation rates can trade the purchasing power of the VND leading to depreciation.
5. Speculative activities. Market speculation and currency hoarding can amplify exchange rate volatility. These five factors are the same factors representing the exchange rate between the USD and IQD.
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