1 USD= 23,201 Vietnamese Dong
In Vietnam the currency is called “The Vietnamese Dong”. It can seem incredibly overwhelming to deal with at first as the numbers are incredibly high. One US dollar is equivalant to 23,201 Vietnamese Dong! Get used to dealing in the hundreds of thousands for daily expenses and often easily into the millions!
High Inflation Country
The high value currency is due to the countries excessive inflation rates that have existed for quite some time. The average inflation rate in Vietnam between 1996 to 2018 is a whopping 6.39% which is well over the healthy rate of 2%.
Why is it called the “Dong”
The name “dong” is often valid for one cheap joke among travelers who visit Vietnam. The eytmology is tracable back to the Chinese word “tong qian” which referred to the bronze coins used during the dynistic areas in China and Vietnam. In Vietnam they call their coins “dong tien”, dong refferring to their currency and tien means money. It was first introduced after Ho Chi Minh took power from the French in 1946 replacing the French piastre de commerce. To start it was replaced at a value of 1:1 but after revaluations the dong was worth just 1/1000th of the French Indochina piastre.
Following the collapes of South Vietnan in 1975 the South Vietnamese took up the “Liberation Dong”. It was not until 1978 that the government unified the Southern and Northern currencies into one unified currency, and this is the iteration that is still in use today.
How to Pronounce It
It is pronounced ‘dawm’ (/dɒŋ/ .
The accent above the letter ô is a diminishing tone. It compares to the tone that you use when you say “oh…”.
The Current State of the Vietnamese Dong
Vietnam is still very much a cash heavy society. Largely this is because a significant portion of the Vietnamese economy runs “off the grid”. People pay for everything in cash and even in business it is not unsuual to see thick stacks of 500,000 VND notes when a deal is about to be closed.
The Vietnamese Dong is pegged to the US Dollar. It is a movable peg which means the government can revalue dong when they see it as appropriate. It has been revalued 5 times since 2014, but the adjustments have been small. The hope and expectation by experts is that there will not be need for any drastic monetary action in the near future.
After the unification of the currency in 1978 the government initially issued bank notes of 5, 10, 20 and 50. In 1985 the government had to hald production of the original bank notes and issue new ones that were 10 times the value of the first ones. This repeated in 1987 when the government had to issue new banknotes up to 5000 and then again in 1990 when they had to release bank notes up to 50,000. Finally in 2003 there were bank notes being issued up to a massive 500,00.
Up until recently the US Dollar was circulating around as an alternative currency. Today shops are no longer allowed to accept USD or advertise in USD. However neighboring Cambodia still uses the USD as their defacto currency.
Despite the extremely high denomination there are no talks to devalue the dong. Even though knocking off a few zero’s would make sense. For example knocking off four zero’s would make 1 USD worth 2 VND.