Is the Dong a good currency?

Up until September, the dong was the most stable currency in the region, with the economy recording another quarter of strong growth and solid exports providing policymakers with plenty of hard currency to support it. But October alone saw a 4% erosion in the dong's value against the dollar, underperforming its peers in Asia.

What happened to the Dong?

When the SBV last widened the band around its daily dong reference rate on Oct. 17 to 5% from 3% -- which some traders likened to a de facto devaluation -- the currency fell to the weak end in a sign of the heavy demand for dollars. By 0324 GMT on Wednesday, the dong was down 0.04% to 24,855 per dollar.

Why did the dong fall 8% this year?

The dong , is a managed peg to the dollar and has fallen 8% this year, pressured by capital outflows as the U.S. Federal Reserve repeatedly raises rates to tame inflation. The State Bank of Vietnam (SBV) has intervened to defend the currency, although it rarely discloses FX reserves data or the amount of dollars spent.