Vietnam đồng

Vietnam đồng. The đồng is the official currency of the Socialist Republic of Vietnam, issued and managed by the State Bank of Vietnam. It holds the distinction of being one of the world's lowest-valued currency units by face value, a status shaped by its complex monetary history. The currency is subdivided into ten *hào* or one hundred *xu*, though these subunits are now obsolete due to inflation.

History

The term "đồng" was first adopted in 1946 by the Viet Minh government of Hồ Chí Minh, replacing the French Indochinese piastre used during the colonial period administered by the Bank of Indochina. Following the Geneva Accords and the partition of the country, separate currencies circulated in North Vietnam and South Vietnam; the North retained the đồng while the South used the South Vietnamese đồng. After the Fall of Saigon and the reunification of Vietnam in 1975, the new government introduced a unified currency in 1978, replacing the southern currency at a rate of 1 new đồng for 0.8 southern đồng. Subsequent revaluations occurred, notably in 1985, which triggered a period of hyperinflation, a crisis partially mitigated by the economic reforms of Đổi Mới initiated at the 6th National Congress of the Communist Party of Vietnam.

Coins and banknotes

Coins, produced by the Vietnam Mint, were reintroduced in 2003 after a long hiatus and include denominations such as 200₫, 500₫, 1,000₫, 2,000₫, and 5,000₫, often featuring the national emblem of Vietnam. Banknotes, printed by the Vietnam Banknote Printing Technology Company, dominate everyday use and span a wide range from 1,000₫ to 500,000₫. The current polymer note series, introduced progressively since 2003, depicts prominent national figures like Hồ Chí Minh and landmarks such as Hạ Long Bay and the Đền Hùng. Commemorative notes have also been issued for events like the 2006 APEC Summit in Hanoi.

Exchange rates and inflation

The đồng has historically been managed under a crawling peg system by the State Bank of Vietnam, with its value primarily referenced against the United States dollar. Periods of high inflation, particularly following the Asian financial crisis and during global commodity shocks, have led to significant devaluations. The exchange rate is influenced by monetary policy, trade balances with major partners like the United States and China, and remittances from the Vietnamese diaspora. Recent stability has been supported by foreign exchange reserves and interventions by the International Monetary Fund.

Security features

Modern polymer banknotes incorporate advanced security elements to prevent counterfeiting, a responsibility of the Ministry of Public Security (Vietnam). These features include transparent windows with complex holographic images, shadow images, and see-through registers. Specific denominations utilize latent images, microprinting, and fluorescent ink that glows under ultraviolet light. The substrate itself contains a unique security thread and raised print for tactile identification, aligning with global standards set by institutions like the International Bank Note Society.

Usage and economy

The đồng is the sole legal tender for all domestic transactions within Vietnam, fueling one of Southeast Asia's fastest-growing economies centered on manufacturing, exports, and tourism in cities like Ho Chi Minh City and Da Nang. Its low unit value necessitates large numerical amounts for everyday purchases, though digital payments via platforms like MoMo are rapidly gaining traction. The currency's role is pivotal in major national projects, including investments in infrastructure like the North–South Expressway (Vietnam) and energy sectors, with monetary policy closely coordinated by the Communist Party of Vietnam and the National Assembly (Vietnam).

Category:Currencies of Asia Category:Economy of Vietnam