What Is the VND (Vietnamese Dông)?

VND (Vietnamese Dong) is the currency abbreviation and full name, Vietnamese dông, of the currency for Vietnam. It replaced the use of separate North and South Vietnamese money in 1978.  

VND is considered to be an exotic currency as there is not much interest for it on forex markets or in global finance. It is loosely pegged to the Dollar through an arrangement called a crawling peg .As of August 2020, 1 U.S. dollar is equal to roughly 23,200 VND.

Key Takeaways

  • The Vietnamese dông (VND) is Vietnam's national currency, with its current incarnation issued since 1978.
  • VND is managed by the State Bank of Vietnam through a crawling peg to the U.S. dollar.
  • The word dông is used in Vietnamese to describe any money or currency generically, and so the national currency must always specify "Vitenamese dông".

Understanding the Vietnamese Dông

VND, short for the Vietnamese dông, is often presented with the symbol d. It is composed of 10 hào and 100 xu. It’s important to note that while the dông was historically made up of these two sub-units, neither the hào nor the xu have been used in Vietnam for many years.

The word "dông" is used in the Vietnamese language as a term for any currency, modifying it appropriately with the country's name before it. So, for example, a Vietnamese-fluent person living in the United States may refer to the U.S. dollar as the "U.S. dông.” Additionally, "U.S. hào" and "U.S. xu" can be used in reference to the U.S. dime and penny coins. So, using the word “dong” alone to refer to Vietnam’s currency will not suffice: Vietnamese dong must be referred to as "dông Vietnam" (i.e. Vietnamese dông).

The Vietnamese currency was created in 1946, when the Viet Minh government, which later became the government of North Vietnam, introduced national money, replacing the French Indochinese piastre. The State of Vietnam, which would later become South Vietnam, issued their own money in 1953, with their banknotes listed the price in both dông and piastres, reflecting its recent transition. After the fall of Saigon in the mid-1970s, South Vietnam issued the liberation dông. With Vietnam being reunified in the late 1970s, they also reunified the dông in 1978.

A Broader Look at the Vietnamese Currency

Vietnamese coinage included denominations of 200, 500, 1000, 2000, and 5000 dôngs. These coins are no longer minted or in active use, yet they are still legal tender. Currently, most banknotes commonly found in circulation are 1,000, 2,000, 5,000, 10,000, 20,000, 50,000, 100,000, 200,000 and 500,000 dông.

The Vietnamese dông, issued by The State Bank of Vietnam, has been marked by chronic inflation. It is one of the poorest currencies worldwide according to the global currency market. Throughout the 2010s, one dollar traded for around 22,000 - 23,000 Vietnamese dông. 

In 2017, Bloomberg reported that Vietnam has been moving from agricultural economy to a hub for electronics manufacturing and assembly, particularly with a large investment by Korea's Samsung Electronics. This has meant that the economy has grown more than 6 percent in the prior two years, becoming among the fastest growing in the world. Furthermore, they report that while other Asian currencies such as the Thai baht and the Malaysian ringgit have surged, and the Philippine peso has fallen, the dông is little changed and therefore one of the most stable Asian currencies.