The central bank believes that for an open economy like Vietnam, the sharp devaluation of the local currency will not help boost exports, but will do more harm than good.

Foxconn (Taiwan), TLC and Lenovo (China), Hanwa (South Korea) and Yokowo (Japan) are relocating their factories to Vietnam as a shelter from the ‘storm’ of the US-China trade war.

The sudden depreciation of Chinese yuan against the US dollar brings more difficulties to Viet Nam’s yarn industry, according to Viet Nam Textile and Apparel Association.

A currency war could break out among a number of countries, Nguyen Tri Hieu, a finance expert told the press recently.

The Vietnamese dong (VND) will weaken only slightly during the remaining months of 2019, with the 2019 average predicted to slide to VND23,300/USD, from the previous forecast of VND23,440/USD.

In recent days, the U.S. dollar/dong exchange rate has continuously declined on both the official and the free markets after a strong rise in April and May.

 The Vietnam Dong (VND) is among the most stable currencies in Asia this year, said the US-based Bloomberg News.