The decision of the State Bank of Vietnam to increase the exchange rate band from +/-2 per cent to +/- 3 per cent to deal with the devaluation of the Chinese Yuan at the end of August is viewed by experts as the right step to take.It will, however, have an impact on the country’s real estate market, as rising exchange rates will see real estate companies eventually faced with higher costs and declining profitability in the future unless they push up house prices.
The move also creates opportunities in real estate, though, because it will remain a safe investment channel compared to securities and gold given the devaluation of the Chinese Yuan triggered panic in stock markets.
