Vietnam's central bank devalued its currency and raised interest rates to rein in accelerating inflation and a widening trade deficit that is eroding confidence in the dong.
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"They want to make sure that inflation expectations are anchored," said Jaseem Ahmed, the Manila-based director of the Asian Development Bank's financial sector, public management and trade division for Southeast Asia. "They are also probably trying to give a sense that people don't need to worry about substantial movements in the exchange rate."
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Vietnam's dong has fallen 2.3 percent this year, heading for a second annual decline.
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The dong traded at between 19,600 and 19,800 in the so- called black market in Ho Chi Minh City, according to a state- run telephone information service. The gap between unofficial rates and the spot rate has widened from about 5 percent at the start of the month.

... Inflation may accelerate to 6 percent by the end of the year, Deputy Prime Minister Nguyen Sinh Hung said last week. ... "There are risks of inflation picking up," Hung said in a Nov. 18 interview in Hanoi. "Since we wanted to boost economic growth, we injected a large volume of funds to businesses."