VND (Vietnamese Dong): What it is, How it Works

What Is the VND (Vietnamese Đồng)?

The VND is the currency abbreviation for the Vietnamese dồng. It is the national currency for Vietnam, replacing separate North and South Vietnamese money in 1978. The dồng is considered an exotic currency due to its lack of interest in the forex market and global finance. Until 2016, it was loosely pegged to the U.S. dollar through a crawling peg arrangement.

Key Takeaways

• The VND is the abbreviation for Vietnam’s national currency, the Vietnamese đồng.
• The State Bank of Vietnam manages the VND through a crawling peg to the U.S. dollar.
• In Vietnamese, "đồng" is used generically to describe any money or currency. Therefore, the national currency must always specify Vietnamese đồng.

Understanding the VND (Vietnamese Đồng)

The VND, short for the Vietnamese đồng, is often presented with the symbol ₫. It is issued by the State Bank of Vietnam in denominations of 100, 200, 500, 1,000, 2,000, 5,000, 10,000, 20,000, 50,000, 100,000, 200,000, and 500,000. A single đồng is composed of 10 hào and 100 xu, which are not used in Vietnam. The bank also mints coins in 200, 500, 1,000, 2,000, and 5,000 denominations as part of efforts to improve the monetary system. Some cotton paper banknotes are still being circulated alongside the new set of money.

The currency was established in 1946 to replace the French Indochinese piastre. South Vietnam issued its own money in 1953, listing prices in đồng and piastres. After the fall of Saigon, South Vietnam issued the liberation đồng. In 1978, the đồng was reunified after Vietnam itself was reunified. Today, Vietnam’s economy has grown significantly, particularly in electronics manufacturing and assembly. The đồng remains stable compared to other Asian currencies, such as the Thai baht (THB), the Malaysian ringgit (MYR), and the Philippine peso (PHP).

Investors interested in Vietnam may consider mutual funds or exchange-traded funds.

Special Considerations

The word "đồng" is used generically in Vietnamese to refer to any currency, modifying it with the country’s name. For example, someone in the United States who speaks Vietnamese may refer to the U.S. dollar as the "U.S. đồng." Additionally, "U.S. hào" and "U.S. xu" may be used to refer to U.S. dime and penny coins. Simply using the word "đồng" alone is insufficient when referring to Vietnam’s currency. It must be specified as "Vietnamese đồng."

How Much Is $1 in Vietnamese Đồng?

What Is the Vietnamese Đồng Price Prediction for 2023?

Prediction.net predicts a price increase of $0.000052 for the Vietnamese đồng. WalletInvestor predicts a price increase to $0.000046, while TradingBeast sets its prediction at $0.000048.

Is Vietnam One of the Fastest Growing Economies in the World?

Yes. Vietnam’s GDP growth is expected to reach 5.8% in 2023. Only India and the Philippines are predicted to outpace Vietnam with growth rates of 5.9% and 6%, respectively.

The Bottom Line

Overall, the Vietnamese đồng is the national currency of Vietnam, managed by the State Bank of Vietnam. It is a stable currency despite being considered exotic. Vietnam’s growing economy makes it an attractive investment destination.