The dong depreciated to a new low against the U.S. dollar Wednesday morning, with state-owned Vietcombank selling the greenback at VND24,620 at 11.30 a.m.
The Vietnamese currency fell 0.12% from Tuesday and 7.24% since the beginning of the year. Eximbank sold the dollar at VND24,620, 0.24% higher than Tuesday, and Techcombank at VND24,680, 0.33% higher.
The U.S. Dollar Index, which measures the currency’s strength against six major currencies, is at the highest level since 2002 of around 112.
Analysts expect the dong to come under more pressure from a surging dollar in the remaining months of this year since the State Bank of Vietnam does not have much reserves left to defend the dong after selling around 20% on it so far this year.
As up to 70% of all trade contracts in Vietnam are paid in dollars, its continuing strength is bad news for businesses.