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Dong Unleashed: Vietnam Preserves Currency Shrinkage With Wider Trading Channel

Tyler Durden's picture




 

Many years ago, we said that the real comedy in the world of FX won't start until Vietnam start devaluing its currency. And even as Vietnam decided to slash its Dong on numerous occasions over the years...

 

... we were looking forward to all the amusement the Asian country, once engaged in physical war with the US would provide us in its response to the just launched FX war with China, in order to preserve its currency's ongoing shrinkage.

We got the answer overnight when Vietnam announced it would widen the dong’s trading band on Wednesday to further weaken the Dong in response to the comparable shrinkage by China, its biggest trading partner.

The immediate result: the latest dong prolapse, which shrank just as expected as part of its entry in the currency war launched by China earlier this week.

The newly lubricated dong can therefore now slide as much as 2% on either side of the fixing channel, up from 1 percent previously, the central bank said in a statement. And while under similar circumstances comparably named instruments, either monetary or anatomical, seek expansion, the Vietnamese monetary unit promptly weakened 1% to 22,040 a dollar as of 2:16 p.m. in Hanoi.

This is neither the first nor last time Vietnam has devaluing: as Bloomberg reminds us, the move follows two devaluations of the dong, by 1 percent each, in January and May. The action today is “to help the dong be more flexible” and maintain competitiveness’’ of Vietnamese products, as the yuan devaluation will have a negative economic impact, the State Bank of Vietnam said. Export growth slowed to 9.5 percent in the first seven months of 2015, compared with 14.1 percent in the year-earlier period.

“This is very timely policy action. The move today would help promote exports,” Alan Pham, chief economist at VinaCapital Group, Vietnam’s biggest fund manager, said by phone from Ho Chi Minh City. “Vietnamese exports have been under great pressure from the U.S. and EU markets.”

And now they are under great pressure from Chinese markets as well, but at least the dong action wasn't premature.

Widening the band is “a natural move for Vietnam,” said Attila Vajda, managing director at Project Asia Research, a Singapore-based advisory firm. “Its economy is dependent on exports and pegging its currency to a strong dollar leads to a loss of competitiveness.”

And if a wider swinging dong is not enough, there is always cold liquidity in the form of monetization, to precipitate even more shrinkage if the need arises.

 

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Wed, 08/12/2015 - 11:28 | 6418463 AgentHarlequin
AgentHarlequin's picture

Don't slash your dong!

Wed, 08/12/2015 - 11:30 | 6418469 Takeaction2
Takeaction2's picture

Vietnemese Dong vs. USD (US Dong) ...hmmm  Short it.

Wed, 08/12/2015 - 11:39 | 6418504 OrangeJews
OrangeJews's picture

Short it?  I was hearing people tell me to Long Duck Dong...

 

anyone?  anyone?

Wed, 08/12/2015 - 11:42 | 6418516 BaBaBouy
BaBaBouy's picture

"Dong Unleashed: Vietnam Preserves Currency Shrinkage With Wider Trading Channel"

Tyler, Don't You Mean "Dong Shrinkage In Vietnam" ???

Wed, 08/12/2015 - 11:44 | 6418531 Bunghole
Bunghole's picture

Dong.  Where is my automobile?

https://www.youtube.com/watch?v=R8zCdw22g0k

Wed, 08/12/2015 - 12:37 | 6418740 pods
pods's picture

How the hell would a wider channel help with a shrunken Dong?

I would think you would have the opposite effect:  Throwing a hot dog down a hallway.  Otherwise known as the Madonna effect.

pods

Wed, 08/12/2015 - 13:06 | 6418859 Normalcy Bias
Normalcy Bias's picture

She sooo horny! She love you looong time! Dong sucky sucky...

https://www.youtube.com/watch?v=JEEWE7gcPw0

Wed, 08/12/2015 - 13:42 | 6419023 flapdoodle
flapdoodle's picture

gonna go downtown

gonna see my gal

gonna sing her a song

gonna show her my ding dong...

Wed, 08/12/2015 - 15:05 | 6419425 Trogdor
Trogdor's picture

M-m-ust.... f-f-fight ...... 7th grade .... humor ..... aaarrrrrghhhh.....

Wed, 08/12/2015 - 21:12 | 6420629 StychoKiller
StychoKiller's picture

Yeesh!  I hate it when my dong shrinks! :>D

Wed, 08/12/2015 - 11:34 | 6418488 BullyBearish
BullyBearish's picture

Just read that Lorena Bobbit is the new Vietnamese Treasury Secretary...

Wed, 08/12/2015 - 13:06 | 6418861 Nolde Huruska
Nolde Huruska's picture

No. That would be Ding Dong.

Wed, 08/12/2015 - 13:14 | 6418903 sun tzu
sun tzu's picture

Is your dong shrinking?

Wed, 08/12/2015 - 12:23 | 6418689 Toxicosis
Toxicosis's picture

This article is terrible.  Dong slashing, unleashing the dong, dong shrinkage, and than asking the dong to be more flexible.  For Christ's sake it's just a currency not part of any mammalian anatomy.  For shame, for shame.

Wed, 08/12/2015 - 12:38 | 6418743 pods
pods's picture

Do I sense a bit of Dong envy?

Wed, 08/12/2015 - 12:38 | 6418746 Pickleton
Pickleton's picture

Dont forget a well lubricated dong

 

"The newly lubricated dong can therefore now slide"

 

Wed, 08/12/2015 - 12:42 | 6418757 pods
pods's picture

Protect her from your girth with the best lube on earth..............KY Jelly.

Wed, 08/12/2015 - 14:56 | 6419367 zvzzt
zvzzt's picture

indeed - so childish and pathetic (and tiring), Reminds me of 'The Siege of the city of Kut (Iraq). Kut is Dutch is fanny (or cunt for you US readers). Try giving a lecture on that in front of a class of 12 years olds (or some ZH readers, apparantly). 

 

*sigh*

 

oh, and by the way, my wife has 100,000 dong under her matress.... *snickers*

Wed, 08/12/2015 - 21:14 | 6420632 StychoKiller
StychoKiller's picture

So long as the dong on top of the mattress is working...

Wed, 08/12/2015 - 11:33 | 6418470 Dr. Engali
Dr. Engali's picture

Last time I unleashed my dong I ended up with a 7.5 pound bundle of "joy". ;->

Wed, 08/12/2015 - 11:50 | 6418561 JoeySandwiches
JoeySandwiches's picture

Could be worse. I got a 7.5 year jail sentence.

Wed, 08/12/2015 - 12:24 | 6418692 Toxicosis
Toxicosis's picture

LOL!!!

Wed, 08/12/2015 - 13:15 | 6418913 sun tzu
sun tzu's picture

He got 18 years of jail time

Wed, 08/12/2015 - 11:33 | 6418475 BandGap
BandGap's picture

Unleash? Time for Long Dong Silver!

https://en.wikipedia.org/wiki/Long_Dong_Silver

 

Wed, 08/12/2015 - 11:33 | 6418478 buzzardsluck
buzzardsluck's picture

Pretty sure a chick wrote this article...

Wed, 08/12/2015 - 11:34 | 6418480 Wassifelle
Wassifelle's picture

I think I've seen quite enough "Good Morning Vietnam."

Wed, 08/12/2015 - 11:34 | 6418481 Consuelo
Consuelo's picture

Just how much more can an Asian 'Dong' shrink...?

Wed, 08/12/2015 - 11:34 | 6418483 Dr. Engali
Dr. Engali's picture

Lol.... funny article Tyler. 

Wed, 08/12/2015 - 11:57 | 6418586 commishbob
commishbob's picture

One of the best, most cleverly-written juvenile financial articles ever.

Wed, 08/12/2015 - 12:02 | 6418605 clade7
clade7's picture

Yep! "Dong, Shrinkage, Vietnam Wider Channel"  ... "too beaucoup" right?

Wed, 08/12/2015 - 12:03 | 6418611 NoVa
NoVa's picture

yup - funnier if their currency was named Johnson

"the band on the Johnson was widened to allow for more Johnson shrinkage - "

 

Just saying - 

Wed, 08/12/2015 - 23:35 | 6421091 StychoKiller
Wed, 08/12/2015 - 11:34 | 6418484 AgentHarlequin
AgentHarlequin's picture

"but at least the dong action wasn't premature" "And if a wider swinging dong is not enough"...

Tee hee hee

Wed, 08/12/2015 - 11:42 | 6418515 Amish Hacker
Amish Hacker's picture

The problem with world trade isn't that certain currencies need to be weakened. Years of centrally mis-managed interest rates  have led to grotesque misallocations of capital and overcapacity everywhere. Now, global recession has stifled demand for all commodities, so like it or not, here comes the giant deflationary unwind.

Currency wars are an indication that central banks are in denial of these obvious facts.

Wed, 08/12/2015 - 11:47 | 6418537 jose.six.pack
jose.six.pack's picture

slash its Dong
ongoing shrinkage
widen the dong’s
weaken the Dong in response to the comparable shrinkage by China
latest dong prolapse
shrank just as expected as part of its entry in
newly lubricated dong can therefore now slide
comparably named instruments, either monetary or anatomical
to help the dong be more flexible
at least the dong action wasn't premature
a natural move
if a wider swinging dong is not enough
precipitate even more shrinkage

emphasis mine for double occurrances

Wed, 08/12/2015 - 11:49 | 6418560 SillySalesmanQu...
SillySalesmanQuestion's picture

Thanks Tyler for the really bad, disturbing visual of the newly lubricated Dong, sliding on either side of the fixing channel. :)

Wed, 08/12/2015 - 11:56 | 6418582 NubianSundance
NubianSundance's picture

Do a hundred dongs equal a ding?

Wed, 08/12/2015 - 11:58 | 6418589 youngman
youngman's picture

I take a blue pill to strengthen my Dong..what color do I take to weaken it...

Wed, 08/12/2015 - 12:13 | 6418642 BandGap
BandGap's picture

Think Rosie O' Donnell nude. That should do it.

Wed, 08/12/2015 - 12:25 | 6418697 clade7
clade7's picture

Blue pill to get a hardon?  What are you rich? 

Around here we stick a green pinecone up our ass!..time tested, free and effective!  And a nice romantic woodsey aroma with no after effects either...where do you think the term 'woody' came from?  Damn kids and their pills!!

Wed, 08/12/2015 - 12:17 | 6418656 cheech_wizard
cheech_wizard's picture

if your widened dong lasts longer than four hours...

Wed, 08/12/2015 - 12:31 | 6418719 earleflorida
earleflorida's picture

America?
The elephant in the Chinese closet...[!]

Wed, 08/12/2015 - 12:36 | 6418737 neuronius
neuronius's picture

It's funny how Rickards & Co. got people looking at this as a "Currency War." 

It is no such thing.

What we are seeing are the sovereign governments reflecting the true effects USFED money printing when the effects can no longer be hidden.

A currency war assumes that there is fighting coming from both sides.  The war has already occurred, and has already been lost.  All we are seeing is the delayed score-keeping as we come to the end of the game.

 

Wed, 08/12/2015 - 12:53 | 6418808 SmedleyButlersGhost
SmedleyButlersGhost's picture

Enough of this tomfoolerly. We need to know how Yellen will react to the Dong movement and are Jamie and Lloyd feeling any pressure from the Dong movement

Wed, 08/12/2015 - 13:29 | 6418956 Shirley Swanepoel
Shirley Swanepoel's picture

Where's the meat?

Wed, 08/12/2015 - 20:44 | 6420554 iamtheeggman wh...
iamtheeggman whooooooooooooo's picture

can't we all just get a dong?

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