The lowdown on the Vietnamese dong
Standing proud as the currency of Vietnam since its unification on May 3 1978, the Vietnamese dong may just make you feel like a millionaire – $100 will get you about 1.6 million dong!
The word dong itself comes from the term đồng tiền which simply means ‘money’. It’s related back to the Chinese term tóng qián, which refers to the Chinese bronze coins that were used as currency during the ancient dynastic periods of China and Vietnam.
In 1946, the Viet Minh government – who later became the government of North Vietnam – introduced the dong to replace the French Indochinese piastre at the same value. In 1951, the rate was revalued at 100 to 1 and by 1958, it had been raised again to 1000 to 1. In South Vietnam, both piastres and dong banknotes were issued in 1953. When the city of Saigon fell on September 22 1975, South Vietnam’s currency became the Liberation dong, worth 500 of the old South Vietnam dong.
Vietnam was reunified on May 3 1978 and the dong followed suit by merging into one currency. One new dong was equal to one Northern dong and 0.8 Southern Liberation dong – until it was revalued again on September 14 1985 due to inflation, with the new dong worth 10 of the old.
A look back at Australian dollar to Vietnamese dong rates
In 1986, a major economic reform was undertaken in Vietnam. The country’s new leaders were unhappy with the lack of economic improvements in the country after the end of the Vietnam War and they put reforms in place to change Vietnam from a ‘planned economy’ to a ‘socialist-oriented market economy’.
By October 2008, Vietnamese dong were exchanging at a rate of ₫10,437 to 1 Australian dollar. These rates continued to rise steadily, reaching ₫21,464 to $1 by August 2011, remaining around this level over the next couple of years.
Devaluing the dong
In June of 2014, the dong was still valuing at around ₫20,000 and was devalued by 1% in the hopes that it would help economic growth, as well as the growth and competitiveness of exports. This was followed again in January 2015 with a devaluation of 1% and again in May of 2015 with a devaluation of 2%.
The relationship between the Vietnamese dong and the US dollar is an important one. Although the dong is not freely convertible, it remains loosely pegged to the dollar in an arrangement known as a ‘crawling peg’. If you fancy using US dollars whilst you’re in Vietnam, they’re widely accepted and used in most Vietnamese cities, although you’re likely to get a much better rate by converting your dollars to dong instead.
