UOB Bank: Global monetary policy will be affected by Mr. Trump

Mr. Abel Lim, Director of Advisory and Asset Management Strategy, UOB Bank (Singapore) - Photo: UOB

The above forecast was made by UOB at the event "Market Update: Global and Vietnam Economic Outlook 2025" held late today, March 26.

UOB: Exchange rate will reach 26,000 VND/USD in the third quarter of this year

At the event, Mr. Abel Lim - Director of Advisory and Asset Management Strategy, UOB Bank (Singapore), commented that global monetary policy will be dominated by the economic and inflationary impacts of the policies of US President Donal Trump.

Central banks around the world will carefully monitor inflation and trade developments to make appropriate interest rate adjustment decisions.

“The market is increasingly expecting more rate cuts from the Federal Reserve this year. But our view is that the Fed will only cut rates once, by 0.25%, in the second quarter,” said Abel Lim.

Regarding currencies, according to Mr. Abel Lim, most Asian currencies have weakened against the USD recently, for example, the VND has fallen to only about 25,600 VND per USD in early March. This decline is likely to continue due to the slowdown of the Chinese economy and the possibility of the US imposing tariffs on Vietnam.

However, several factors could help ease the VND's depreciation pressure, including strong domestic growth prospects and the State Bank's commitment to ensuring "exchange rate stability".

"Our forecast for the USD/VND exchange rate is 25,800 in Q2 2025, 26,000 in Q3 2025, 25,800 in Q4 2025 and 25,600 in Q1 2026," Mr. Abel Lim predicted.

Vietnam's economy is stimulated through public investment.

Mr. Le Thanh Hung, Investment Director of UOB Asset Management Vietnam - Photo: UOB

Commenting on Vietnam's economy, Mr. Le Thanh Hung - Investment Director of UOB Asset Management Vietnam, said that Vietnam's economy is expected to continue to grow strongly in 2025 thanks to domestic economic stimulus factors through public investment and credit growth as well as expectations for recovery in domestic consumption and the real estate sector.

"The Government submitted to the National Assembly for approval a public investment plan for 2025 of about VND875,000 billion (equivalent to about USD36 billion), a sharp increase compared to the actual disbursement in 2024 of VND568,000 billion, which has been creating momentum to promote public sector investment, increasing confidence in other economic sectors towards development," said Mr. Hung.

However, Mr. Le Thanh Hung also raised the issue of the impact on Vietnam's economy during President Donald Trump's second term with two main concerns. That is, Vietnam's export revenue could be negatively affected if the US imposes tariffs on goods from Vietnam.

In addition, there is pressure on the USD/VND exchange rate when the USD continues to increase sharply. This concern stems from the fact that the US is Vietnam's second largest bilateral trade partner (after China), the largest export market (accounting for 30% of total export turnover) and has the largest trade deficit with Vietnam.

In response to US President Donald Trump's move to use tax policy as a tool to bring parties to the negotiating table to reach a more favorable agreement for the US, Mr. Hung presented a number of solutions from Vietnam to limit negative impacts and promote economic growth to achieve the Government's goals.

Accordingly, Vietnam needs to increase imports from the US such as liquefied natural gas, aircraft, agricultural products, etc. to reduce the trade surplus with the US. At the same time, we need to promote internal growth drivers such as increasing public investment in transport and energy infrastructure projects, increasing domestic consumption, and promoting credit growth to increase capital sources for the economy.

Besides, Vietnam needs to expand multilateral relations, upgrade comprehensive strategic partnerships with other countries to expand export markets, attract investment capital, and reduce dependence on the US market...

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Source: https://tuoitre.vn/ngan-hang-uob-chinh-sach-tien-te-toan-cau-se-bi-anh-huong-tu-ong-trump-20250326212511733.htm