Vietnam's latest devaluation of the dong isn't a new shot fired in an Asian currency war, just the country catching up with regional peers that have already seen their currencies plunge, analysts say. The State Bank of Vietnam SBV devalued the dong VND by 1 percent against the dollar on Wednesday—its third adjustment so far this year—and simultaneously widened the trading band to 3 percent from 2 percent previously, the second increase in six days.

Indeed, Vietnam's aggressive move has been widely interpreted as a blatant attempt to keep its exports competitive in the wake of China's historic 2 percent currency devaluation last week. Beijing is Ho Chi Minh's largest trading partner, with Vietnamese exports to China rising 3. Both countries are low-cost manufacturing hubs and compete for investment from foreign companies, so a weaker yuan makes Vietnamese goods more expensive in comparison.

Read More Here's the Asian market that excites traders now.

USD to VND Exchange Rate - Bloomberg Markets

But the reality is that the SBV is merely beginning to align with brutal Asia-ex Japan AXJ shifts," Varathan added. The dong has depreciated nearly 5 percent so far this year, but Varathan notes it still hasn't closed the gap with most other ASEAN currencies. In comparison, Thailand's baht has dropped 8 percent, the Indonesian rupiah has lost 12 percent and Malaysia's ringgit is 17 percent lower. Re-alignment of the currency therefore seems warranted from a macro-balance perspective," echoed economists at Australia New Zealand Banking ANZ in a note on Wednesday.

Falling exports and the consequent threat of current account pressures also warrant a softer dong, economists argue. Vietnam's current account shows a surplus but the first half of saw imports exceed exports for swiss brokers tax forex first time in three years, leading to expectations for a current account deterioration.

Read More Are the world's most upbeat arti breakout pada forex feeling down?

But adjustments to the exchange rate best buy restocking as Wednesday's move will help cushion the blow from current account deterioration, ANZ said, which is helpful for investor sentiment ahead of a widely anticipated U.

A lower dong also makes the country more attractive to incoming tourists.

Ho Chi Minh City Stock Exchange - Wikipedia

The country's tourism sector is struggling, with tourist visits in the first six months of the year down an annual 11 percent, according to the World Bank. Further currency weakness is widely expected, with Mizuho Bank setting a target of 23, VND per dollar option trading training india earlycompared to Stock market vietnam dong close stock market vietnam dong 22, Asia Europe Stocks Commodities Currencies Bonds Funds ETFs Investing Trading Nation Trader Talk Financial Advisors Personal Finance Etf Street Portfolio Watchlist Stock Screener Fund Screener Tech Mobile Social Media Enterprise Gaming Cybersecurity Tech Guide Make It Entrepreneurs Leadership Careers Money Specials Shows Video Top Video Latest Video U.

Video Asia Video Europe Video CEO Interviews Analyst Interviews Full Episodes Shows Watch Live CNBC U. Business Day CNBC U.

Primetime CNBC Asia-Pacific CNBC Europe CNBC World Full Episodes. Log In Register Log Out News Economy Finance Health Care Real Estate Wealth Autos Consumer Earnings Energy Life Media Politics Retail Commentary Special Reports Asia Europe CFO Council.

Asia Europe Stocks Commodities Currencies Bonds Funds ETFs. Make It Entrepreneurs Leadership Careers Money Specials Shows Investing Trading Nation Trader Talk Financial Advisors Personal Finance Etf Street Portfolio Watchlist Stock Screener Fund Screener. Tech Mobile Social Media Enterprise Gaming Cybersecurity Tech Guide Video Top Video Latest Video U. Video Asia Video Europe Video CEO Interviews Analyst Interviews Full Episodes.

Primetime CNBC Asia-Pacific CNBC Europe CNBC World Special Reports Top States Paris Airshow Trailblazers Trading the World CNBC Disruptor 50 Lasting Legacy Modern Medicine College Game Plan Investing in: Israel Tech Drivers The Brave Ones Trading Nation Shaping the future Future Opportunities.

Register Log In Profile Email Preferences PRO Sign Out. Americas FX Asia-FX EU-FX. Vietnam plays catch up Nyshka Chandran nyshkac.

Did China's yuan devaluation spark a currency war? Sunday, 16 Aug It's the economy, stupid Falling exports and the consequent threat of current account pressures also warrant a softer dong, economists argue.

Nyshka Chandran Reporter, CNBC Asia-Pacific. To view this site, you need to have JavaScript enabled in your browser, and either the Flash Plugin or an HTML5-Video enabled browser.

Download the latest Flash player and try again. YOUR BROWSER IS NOT SUPPORTED. Please upgrade to watch video. The requested video is unable to play. The video does not exist in the system. Please disable your ad blocker on CNBC and reload the page to start the video.