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Dong Unleashed: Vietnam Preserves Currency Shrinkage With Wider Trading Channel
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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Don't slash your dong!
Vietnemese Dong vs. USD (US Dong) ...hmmm Short it.
Short it? I was hearing people tell me to Long Duck Dong...
anyone? anyone?
"Dong Unleashed: Vietnam Preserves Currency Shrinkage With Wider Trading Channel"
Tyler, Don't You Mean "Dong Shrinkage In Vietnam" ???
Dong. Where is my automobile?
https://www.youtube.com/watch?v=R8zCdw22g0k
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
She sooo horny! She love you looong time! Dong sucky sucky...
https://www.youtube.com/watch?v=JEEWE7gcPw0
gonna go downtown
gonna see my gal
gonna sing her a song
gonna show her my ding dong...
M-m-ust.... f-f-fight ...... 7th grade .... humor ..... aaarrrrrghhhh.....
Yeesh! I hate it when my dong shrinks! :>D
Just read that Lorena Bobbit is the new Vietnamese Treasury Secretary...
No. That would be Ding Dong.
Is your dong shrinking?
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.
Do I sense a bit of Dong envy?
Dont forget a well lubricated dong
"The newly lubricated dong can therefore now slide"
Protect her from your girth with the best lube on earth..............KY Jelly.
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*
So long as the dong on top of the mattress is working...
Last time I unleashed my dong I ended up with a 7.5 pound bundle of "joy". ;->
Could be worse. I got a 7.5 year jail sentence.
LOL!!!
He got 18 years of jail time
Unleash? Time for Long Dong Silver!
https://en.wikipedia.org/wiki/Long_Dong_Silver
Pretty sure a chick wrote this article...
I think I've seen quite enough "Good Morning Vietnam."
Just how much more can an Asian 'Dong' shrink...?
Lol.... funny article Tyler.
One of the best, most cleverly-written juvenile financial articles ever.
Yep! "Dong, Shrinkage, Vietnam Wider Channel" ... "too beaucoup" right?
yup - funnier if their currency was named Johnson
"the band on the Johnson was widened to allow for more Johnson shrinkage - "
Just saying -
Big Johnson... :>D
"but at least the dong action wasn't premature" "And if a wider swinging dong is not enough"...
Tee hee hee
no more yankie my wankie the donger need food
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.
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
Thanks Tyler for the really bad, disturbing visual of the newly lubricated Dong, sliding on either side of the fixing channel. :)
Do a hundred dongs equal a ding?
I take a blue pill to strengthen my Dong..what color do I take to weaken it...
Think Rosie O' Donnell nude. That should do it.
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!!
if your widened dong lasts longer than four hours...
America?
The elephant in the Chinese closet...[!]
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.
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
Where's the meat?
can't we all just get a dong?