HANOI (Reuters) - Vietnam devalued the dong currency for the second time this year on Thursday to support exports and curb import demand which has left it with a trade deficit.
The move had been widely expected after Vietnam recorded a US$3 billion trade deficit in the first four months of the year, compared with a surplus of US$2 billion in the same period last year.
The central bank said it had lowered the mid-point rate for the currency on the interbank market by 1 per cent to 21,673 dong per US dollar.
Dollar/dong transactions can move in a band of plus or minus 1 per cent around the mid-point, which the central bank sets daily. The previous depreciation was on Jan. 7, when the central bank also weakened the dong by 1 per cent to help stabilise the foreign exchange market.
The State Bank of Vietnam said in a statement that recent pressure on the dollar/dong rate was "psychological" and "in market expectations", saying its latest move was to help meet socio-economic targets and cope with negative impacts from global markets.
"The (market) expectation is more depreciation as the dong is down just 2 per cent while other currencies in the region have fallen 4-5 per cent now," a money market dealer at a Vietnamese bank in Ho Chi Minh City said.
Last December, central bank Governor Nguyen Van Binh said it would keep the dong depreciation to less than 2 per cent for the whole of 2015.
After Thursday's adjustment, the dong fell to 21,650/21,730 per dollar on the interbank market, from 21,620/21,670 the previous day.
Vietnam's January-April exports rose 8.2 per cent to an estimated US$50.1 billion, while imports surged 19.9 per cent.
The government has projected annual export growth of 10 per cent for the whole of 2015, slowing from a rise of 13.7 per cent last year.