Exchange rate drops shockingly in banks, still stable in the "black market"
Since the afternoon of July 3, the USD/VND exchange rate has been hot with very strong increases and approaching the 24,000 VND/USD mark. However, by the session of July 6, the USD has cooled down.
At the Joint Stock Commercial Bank for Foreign Trade of Vietnam – Vietcombank, early this morning, the exchange rate was adjusted up by 10 VND/USD. However, in the afternoon, the USD suddenly “turned around” and decreased by 30 VND/USD. Thus, compared to yesterday, the USD/VND exchange rate at Vietcombank has decreased by 20 VND/USD to 23,560 VND/USD – 23,900 VND/USD.
Similar to Vietcombank, Vietnam Joint Stock Commercial Bank for Investment and Development - BIDV also increased the USD price in the early morning session, but by the afternoon, the USD/VND exchange rate at BIDV weakened, only 23,580 VND/USD - 23,880 VND/USD, down 20 VND/USD.
At Vietnam Joint Stock Commercial Bank for Industry and Trade - VietinBank, the selling price of USD decreased by 63 VND/USD to only 23,902 VND/USD, but the buying price increased by 17 VND/USD to 23,562 VND/USD.
After 3 days of strong increase, the USD/VND exchange rate dropped dramatically in the banking system but remained stable in the "black market". Illustrative photo
At Vietnam Export Import Commercial Joint Stock Bank – Eximbank, the exchange rate is trading at: 23,580 VND/USD – 23,890 VND/USD, down 20 VND/USD. The exchange rate at Vietnam Technological and Commercial Joint Stock Bank – Techcombank decreased 29 VND/USD for buying, down 33 VND/USD for selling to 23,566 VND/USD – 23,902 VND/USD.
In the free market, the USD could not maintain its hot growth but did not decrease. At Hang Bac and Ha Trung (Hoan Kiem – Hanoi) – the “foreign currency streets” of the capital, the USD/VND exchange rate was commonly traded at 23,700 VND/USD – 23,770 VND/USD, an increase of 30 VND/USD for buying but the selling price remained the same. At different stores, the difference was about 10 VND/USD.
Vndirect Securities Company sees a number of factors that may put pressure on the USD/VND exchange rate in the second half of 2023, including: The FED's operating interest rate may remain at its peak until the end of 2023 to curb inflation, while the State Bank is oriented to continue lowering interest rates to support growth; Domestic inflation may increase from the end of the third quarter of 2023.
However, according to Vndirect, the exchange rate will still be supported by: Trade surplus remains high, FDI and remittances are stable, Share sale agreements to foreign investors expected to be implemented in the second half of 2023 will increase foreign currency supply, Vietnam currently maintains high real interest rates.
“Overall, we believe that the exchange rate may fluctuate more strongly in the second half of 2023, however, the USD/VND exchange rate is forecast to fluctuate no more than +/- 2.0% compared to the beginning of 2023,” Vndirect commented.
USD little fluctuates in world market
It can be seen that in the domestic market, the USD tends to "roller coaster" - sometimes increasing sharply, sometimes decreasing sharply. But in the world market, the greenback increased very slightly. The dollar index increased by 0.04% to 103.38.
The dollar was broadly higher on Thursday, after the release of minutes from the US Federal Reserve's latest policy meeting reinforced market expectations for a rate hike this month.
Minutes of the Fed's June meeting released on Wednesday showed a vast majority of policymakers expect further tightening of US monetary policy, even after they agreed to keep interest rates unchanged last month.
That sent the dollar slightly higher along with Treasury yields, as bets mounted that the Fed would continue its rate-hike campaign this month and that rates would stay higher for longer to tame inflation.
Against the dollar, the euro hit a near one-week low of $1.0843 in early Asian trade, while sterling fell 0.08% to $1.26925.
According to the CME FedWatch tool, the market is currently pricing in an 89% chance that the Fed will raise interest rates by another 25 basis points at its policy meeting later this month.
Elsewhere, the yen rose more than 0.2% to 144.30 per dollar, as concerns about possible intervention from Japanese authorities to support the yen limited its losses.
The Australian dollar fell 0.04% to $0.6651, after falling more than 0.5% in the previous session after a private sector survey showed China's services activity expanded at its slowest pace in five months in June.
“The Australian dollar is very sensitive to any news from China at the moment,” said Sean Callow, senior currency strategist at Westpac.
China's yuan last bought 7.2593 per dollar in offshore markets, after falling about 0.4% in the previous session.
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