What is the Vietnamese Đồng (VND)? – Definition for beginners
Vietnamese Đồng (VND) is Vietnam’s official currency designated by the ISO VND code. In Vietnam, the word dong means money.
In other words, adding a word after the country name applies to the currency. For example, US Dollars are US Dollars, and Vietnam Currency is expressed in Vietnamese Dollars.
In 1978, the Vietnamese dong replaced the old hao currency, equivalent to one-tenth of the dong. At some point, the dong was split into hao, but the dong is considered the smallest unit as hao is no longer legally valid. VND is issued by Vietnamese regional banks and is subject to inflation.
The term VND stands for Dong Vietnam’s currency abbreviation. The dong is the national currency of Vietnam, which replaced Vietnam’s use of the North-South separation in 1978. The Dong is considered an exotic currency due to its lack of interest in foreign exchange markets or global finance. Until 2016, it was freely linked to the US dollar through the peg2 roll.
- Vietnam Dong refers to the official currency of Vietnam and is expressed as an ISO VND code.
- In 2003, Vietnam began exchanging paper money for plastic bills, claiming it could cut printing costs.
- The National Bank of Vietnam also maintains financial stability and regulates all corporate banking operations.
Vietnam dong history
The North Vietnamese government, formerly known as Viet Minh, introduced the dong as its currency in 1946 and substituted the Indochinese piastre. The currency was revalued from 100 to 1 and 1000 to 1 in 1951 and 1959. Likewise, the South Vietnamese currency was controlled by the piastre, which the dong substituted in 1953. The capture of Saigon in 1975 resulted in the alteration of the currency to the liberation dong, and this new currency has a value worth 500 of the previous model of the dong.
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The country’s unity in 1978 resulted in the creation of a single dong. A single unit of the new dong was equal to 0.8 south or north-based dong. On September 14, 1985, the fresh dong value was peed at the 10 of the previous edition of the dong. This revaluation started a period of sustained inflation, mainly in the early 1990s.
In 1978, the National Bank of Vietnam issued banknotes of 5 hao, 1 dong, 5 dongs, 10 dongs, 20 dongs, and 50 dongs. In 1980, the 2 and 10-dong notes were introduced, and in 1981 the 30 and 100-dong notes were introduced. Distribution was halted in 1985 as inflation and economic uncertainty gradually devalued.
In 1985 banknotes were introduced in denominations of 5 hao, 1 dong, 5 dongs, 10 dongs, 20 dongs, 50 dongs, 100 dongs, and 500 dongs. Since inflation was constant, the first notes were 200, 1,000, 2,000, 5,000 in 1987, 10,000 and 50,000 in 1990, 20,000 in 1991, 100,000 in 1994, 500,000 in 2003, and 200,000 in 2006. Presently, the nation’s currency with 5000 VND is no more distributed.
Present-day Vietnamese dong
With the exception of the latest series introduced in 2003, all previous series often confuse users and have consistent designs and themes.
On June 7, 2007, the government ordered an end to producing cotton notes in 50,000 VND and 100,000 VND.
As of September 1, 2007, the circulation of banknotes ceased.
In 2003, Vietnam began exchanging paper money for plastic bills, claiming it could reduce printing costs. Several newspapers in the country opposed the reform, citing printing errors and suggesting that the printing contract was in favor of the son of the governor of Vietnam’s state-owned bank.
As the 2003 series banknotes replaced older banknotes of the same type, now 200, 500, 1000, 2000, and 5000 paper money made of cotton polymer are widespread and accepted.
Сonclusion – Vietnamese dollar, named dong, is the national currency of Vietnam.
- VND stands for Vietnam đồng, the national currency of Vietnam.
- VND is run through a crawling pegging system to the US dollars by the State bank in Vietnam.
- In Vietnam, the word dong is usually used to refer to a currency or money, so Vietnam’s national currency is always expressed as Vietnam’s dong.
What is VND (Vietnamese Dong)?
VND is an abbreviation for Vietnam currency, often denoted by ₫. It is issued by the National Bank of Vietnam, which issues banknotes in denominations of 100, 200, 500, 1000, 2000, 5000, 10,000, 20,000, 50,000, 100,000, 200,000, and 500,000. One dong is made up of 10 hao and 100 xus, which are not used anymore in Vietnam. The bank prints coins in the following quantities: 200, 500, 1000, 2000, and 5000 dongs. These coins are no longer minted or used, but they are still recognized as national currencies.
The currency was established in 1946 when the Government of Vietnam, later the Government of North Vietnam, introduced state funds to replace the French Indochina Piastre. The Vietnamese province, which later became Southern Vietnam, issued its own currency in 1953. These banknotes are denominated in dongs and piastres to reflect the transition period.
After the fall of Saigon in the mid-1970s, South Vietnam announced the issue of liberation dong. Dong reunited in 1978 after the unification of Vietnam in the late 1970s.
Vietnam’s dong, which is highly regulated against the US dollar, is characterized by chronic inflation. According to the global foreign currency exchange market, it is one of the poorest currencies in the world. In the late 2010s, the US dollar was around 22 to 23,000 Vietnam dong. One dollar was equivalent to about 23,171 VND at the average exchange rate in November 2020.
In 2017, Bloomberg reported that Vietnam is starting to move from an agrarian economy to an electronics manufacturing and assembly hub, partly thanks to heavy investment by the investment of large multinational Samsung Electronics from South Korea. That means the economy has grown more than 6% in the last two years, making it the fastest growing in the world. The report also notes that while other Asian currencies, such as the Thai Baht (THB) and Malaysian Kal (MYR), rose and the Philippine Peso (PHP) depreciated, the dong remained almost unchanged as the most stable currency in Asia.
Central bank devalues the dong to broaden its trading range
On August 19, the National Bank of Vietnam (SBV) announced that it had raised the average VND/USD exchange rate by 1.0% from 21,673 VND/USD to 21,890 VND/USD. The bank also decided to increase the exchange rate range from +/- 2.0% to +/- 3.0%, raising the minimum and maximum exchange rates to 21,233 and 22,547 VND per US dollar, respectively. The move follows two devaluations of the dong this year, by 1.0 percentage points each in January and May.
The currency depreciation law will help counter the yuan’s depreciation earlier this month and support Vietnam’s external stance as the region’s currency loses ground to the US dollar. The weakness also means that the SBV can use fewer resources to maintain its exchange rate as high expectations for a rate hike by the Fed later this year put pressure on the currency.
The decision to expand the trading range follows a similar move to extend from +/- 1.0% to +/- 2.0% at VND 21,673 per US dollar concentration on 12 August. The SBV defended the decision, saying the recovery in the US was more substantial and a more flexible trading scope was needed due to uncertainty in Europe from Greece’s debt collapse and other external factors.
SBV’s reconciliation list for August reveals various stresses affecting Asian foreign exchange markets. With these changes, SBV hopes to protect the copper from fluctuations in domestic and international markets and keep Vietnamese exporters competitive.
FAQ – The most asked questions about Vietnamese Dong :
What is the Vietnamese Dong?
As the name suggests, the Vietnamese Dong is the official currency of Vietnam. It is the third lowest-valued currency in the world after the Iranian Rial and Venezuelan Bolivar.
What is the value of the Vietnam Dong currency?
The current value of one Vietnamese Dong is 0.000040 US Dollars.
Is there any categorization in the Vietnam Dong currency?
The banknotes of Vietnamese Dong are available in two families, the polymer family, and the cotton family.
The banknotes belonging to the Polymer family are more expensive to make and worth more. Cotton family banknotes are low in value., but they are no longer in use.
Where can I trade my Vietnam Dong currency?
You can trade your Vietnamese Dong through any reputable trading platform that supports world currencies. You can buy and sell only Polymer family banknotes, as Cotton family banknotes are no longer in use.
Is trading the Vietnam Dong currency safe?
It depends on the online trading platform or exchanges you choose to trade your Vietnamese Dong. You must select a gateway that follows the best web security and cyber safety practices of the most renowned banks and financial organizations. You can choose a mail-order currency exchanger that offers 100% insurance exposure to trade your Vietnamese Dong.
Last Updated on February 17, 2023 by Andre Witzel