USD will continue to decrease, the exchange rate at the end of the year will stabilize at 25,300 VND

The domestic exchange rate has continued its downward trend in parallel with the weakening of the USD index. Accordingly, the central VND/USD exchange rate has decreased slightly since July 22, currently listed at 24,256 VND, similar to the exchange rate on the interbank market. The exchange rate on the free market has adjusted sharply after reaching the historical peak of 26,000 VND/USD, recording 2 consecutive weeks of decline from July 29 to August 5 and is currently trading at 25,540 - 25,640 VND (buy - sell). The selling rate at most commercial banks has now also fallen below the SBV's intervention ceiling.

Foreign currency supply is still basically positive when the trade balance has a surplus of 14 billion USD in 7 months or FDI capital disbursement is 12.5 billion USD.

The State Bank held a meeting on foreign exchange policy and interest rates on US dollar deposits (July 18). The State Bank and economic experts both assessed that there was no need to intervene and that the USD interest rate policy should be kept at 0%. This is an effective solution to support the goal of stabilizing the exchange rate, controlling inflation and increasing the value of VND, reducing the dollarization rate, increasing foreign exchange reserves and affecting remittance flows as well as FII and FDI capital flows...

Not only that, in a recent development on August 5, for the first time since the end of 2023, the State Bank of Vietnam reduced OMO interest rates and treasury bills. The reduction of OMO interest rates and treasury bills by the State Bank of Vietnam is believed to be aimed at establishing a lower interest rate corridor in the interbank market, reducing pressure from mobilization costs for credit institutions.

According to MB Securities Company (MBS), as of July 3, the State Bank of Vietnam (SBV) has sold about 6.5 billion USD since the end of April to curb increasing pressure on the exchange rate. Moreover, the SBV's maintenance of high interbank interest rates has also contributed to reducing the interest rate gap between the USD and VND, thereby supporting against the devaluation of the Vietnamese Dong.

MBS forecasts that the exchange rate pressure will cool down and fluctuate in the range of 25,100 - 25,300 VND/USD in the fourth quarter of 2024 under positive factors, including a positive trade surplus, strong recovery of FDI inflows and tourism. The stability of the macro environment is likely to be maintained and further improvement will be the basis for stabilizing the exchange rate in 2024.

The possibility that exchange rate pressure will ease as we move towards the end of the year is also pointed out by KB Securities Company thanks to the downward trend of DXY that will continue in the final months of the year. At the same time, foreign currency supply and demand in Vietnam will be more balanced as the peak import season for raw materials (June to August) is gradually passing. Entering the fourth quarter, foreign currency supply is expected to increase as Vietnam boosts exports to the US and EU to meet year-end consumption demand, combined with foreign currency supply from remittances and FDI continuing at high levels.

Source: https://laodong.vn/kinh-doanh/usd-se-con-giam-ty-gia-cuoi-nam-on-dinh-muc-25300-dong-1379835.ldo