"it doubled the trading band for the dong against the dollar", can someone explain this sentence?

Question

"it doubled the trading band for the dong against the dollar", can someone explain this sentence?

Answer 1

The dong is the currency of Vietnam.  The dong/USD exchange rate is controlled partially by Vietnam's state bank which declares an official exchange rate every day.  This is not an absolute peg, however since individual traders are allowed to trade dong for USD at a different rate as they see fit, so long as the rate is withing a certain range of the official rate (the trading band).  For example, if the official rate is 16000 dong/dollar, traders could legally exchange the currencies at any rate they see fit between 15840 dong/dollar and 16160 dong/dollar.  This is compromise between an firm peg and a completely floating currency.

On June 27 the Vietnamese central bank changed the width of the permitted trading band from +/-1% of the official rate to +/-2% of the official rate, doubling the width of the trading band.  So before if the official rate was 16000dong/dollar, before they were permitted to trade at any rate between 15840 to 16160, but now they are permitted to trade at any rate between 15680 to 16320.