On Friday the US Dollar Index (DXY), a measure of the greenback’s strength against a basket of currencies, crossed the 98-point mark in the last three sessions, its highest level since May 2017 and almost 3 percent up since June-end.

The Chinese yuan fell for the sixth consecutive session to 7.0931 to the dollar, the lowest level since the 2008 global financial crisis, and edging closer to the crucial 7.1 mark.

Global markets plunged when China allowed the yuan to fall below the key 7 threshold in early August, and investors piled into gold, safe-haven Japanese yen and bonds amid heightened worries of a global currency war, Reuters reported.

But the recent volatility in the global market does not seem to have a big impact on Vietnam, Harry Loh, General Director of the Singapore-owned United Overseas Bank Vietnam, said.

Given the State Bank of Vietnam’s (SBV) clear policy orientation to maintain stability and liquidity in the forex market since the beginning of the year, it will likely keep the dong/dollar trading band at around 2 percent for this year, and so overnight shocks in the market would be unlikely, said Harry Loh.

Several securities companies had also forecast in recent reports that the dong/dollar exchange rate was unlikely to change by more than 2-3 percent, a band Vietnam has maintained in recent years even with global pressures.

According to Bao Viet Securities (BVSC), by the end of July the exchange rate had not changed much since the end of last year, and so the SBV has “sufficiently large room” to manipulate the dong.

The pressure from a rising dollar could be kept at bay until this year because Vietnam has abundant foreign currency reserves, it said.

“Year-end mergers and acquisitions such as BIDV selling a 15 percent stake to South Korea’s KEB Hana Bank, plans by Vietcombank to sell a 6.5 percent stake and MBBank selling 7.5 percent to foreign investors is expected to bring a lot of foreign currency into Vietnam,” BVSC said. It expected the value of these M&A deals to reach $2 billion.

According to Viet Dragon Securities, because FDI prospects are “excellent” this year, foreign exchange reserves will increase, meaning the SBV will have “significant room” to make currency interventions.

Foreign investment in Vietnam is expected to top $20 billion this year, a record high, according to Singapore’s United Overseas Bank (UOB).

On Friday the SBV set the daily reference rate for the dollar at VND23,127. This meant the dong had depreciated by 1.98 percent from a year ago and 1.32 percent since the beginning of this year.

Hoang, a local importer, said Chinese toys are 30 percent cheaper this year. In the first five months, his import volume doubled compared to the same period last year.

A Chinese toy airplane costs VND100,000-150,000 ($4.3-6.4), while a Vietnamese or Japanese one costs five times as much, he added.

“Chinese toys are selling well at low prices. About 60 percent of the toys I sell are from China, the rest from Vietnam and the U.S.”

The CEO of a toy company in Ho Chi Minh City, who did not want to be named, said the quantity of Chinese toys in the market has been growing fast in the first few months. They are being sold in most local shops, markets, street vendors and online, with many not having clear origin and safety certificates.

“Vietnamese toys are struggling to compete as Chinese toys are being sold at much lower prices,” he said.

Vietnam Customs said that toy imports from China in the first five months this year has already accounted for over half of the total value last year, and is set to increase for the rest of this year.

The surge in toy imports is being attributed to the year-long U.S-China trade war, which shows no signs of ending. Experts had warned earlier that China could increase the export of cheap goods to Vietnam to avoid U.S. tariffs.

The U.S. has so far slapped a 25 percent tariff on $250 billion worth of Chinese goods, and President Donald Trump has threatened to apply the same elevated levy on remaining imports from China worth around $300 billion. In retaliation, Beijing also raised tariffs on $60 billion worth of American products.

China has been weakening its currency to improve exports. The yuan fell to its lowest this year on Jun 10 at CNY6.93 per dollar. As of Friday, it has fallen by 3.7 percent compared to a year earlier, according to Bloomberg data.

Vietnam imported $68.7 million worth of toys from China last year, up 21 percent from 2017, according to Vietnam Customs.