Although the rate rise may help to curb inflation, it risks sucking in foreign money, increasing upward pressure on the already overvalued Brazilian real.
The government did nothing to curb inflation.
Pham Hong Hai of HSBC, a bank, in Ho Chi Minh City, says a stronger dong would do much to curb inflation. Officials, farmers and some manufacturers are worried that it might also hurt exports.
To stop prices from rising too fast and curb inflation is not only a concern to the people, but also an important responsibility of the government.
So a modest weakening in external demand might be just enough to stop the economy overheating and curb inflation, allowing Vietnam's remarkable run of growth to continue at a more sustainable rate.
China has adopted a package plan to curb inflation, including interest rate adjustment.
But at the moment most are raising rates to curb inflation.
