Currency, Exchange Rate and Inflation
As of April 2008, 1 U.S. dollar was equivalent to about 20,850 Vietnamese dong. The exchange rate between U.S. dollar and Vietnamese dong is important because the dong, although not freely convertible, is loosely pegged to the dollar through an arrangement known as a "crawling peg". This mechanism allows the dollar-dong exchange rate to adjust gradually to changing market conditions. Vietnam's economy experienced a hyperinflation period in its early years of the extensive reform program, especially from 1989 to 1992. Gold still maintains its position as a physical currency to a certain extent, although it has seen its economic role declining in recent years.
In 2008, inflation was tracking at 20.3% for the first half of the year, higher than the 3.4% in 2000, but down significantly from 160% in 1988.
Read more about this topic: Economy Of Vietnam
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