USD exchange rate increase in October is not a matter of concern

After hitting its lowest level in many months in mid-September 2024, the USD/VND exchange rate increased slightly to 24,852 VND/USD on October 10. Compared to the beginning of the year, the USD exchange rate has increased by 2.44%. Previously, on September 16, 2024, the USD exchange rate fell to 24,530 VND/USD, the lowest level in many months.

According to the macroeconomic assessment report of Dragon Capital Securities (VDSC), the upward trend of exchange rates is not a matter of concern.

Rong Viet Securities believes that the increase in USD exchange rate in the first week of October should be a matter of concern. (Photo TL)

Because the market is receiving more positive information than expected. Typically, positive signals from the US economy or Japan's announcement that it is not ready to continue raising interest rates. These factors have partly pushed the USD to recover in the first week of October.

However, Rong Viet Securities believes that the recovery of the USD will only be short-term. The reason is that expectations for the Fed to continue cutting interest rates remain unchanged. In addition, VDSC also believes that the Japanese government will continue to raise interest rates in the near future.

In addition, the State Bank's management support policies will also be a factor affecting the exchange rate.

In the third quarter of 2024 alone, the SBV injected a net VND165,000 billion through the open market. Since early September 2024, in response to the Fed's interest rate cut signal, the SBV has stopped issuing treasury bills and reduced lending rates by 50 basis points.

According to data from the State Bank of Vietnam, credit growth by the end of September 2024 increased by 9% compared to the beginning of the year and by 16% compared to the same period last year. Thus, by the end of the third quarter of 2024, credit growth exceeded the expected target of 15%. When exchange rate pressure is eased, the State Bank of Vietnam will have more room to continue supporting system liquidity in the fourth quarter of 2024.

Source: https://www.congluan.vn/ty-gia-usd-tang-trong-thang-10-khong-phai-la-van-de-dang-quan-ngai-post316150.html