Why has the US dollar price escalated?

The US dollar price has been increasing sharply over the last two weeks. 

As of the end of March 23, the dollar price in the free market surged to VND23,900 per dollar and the dollar price quoted by commercial banks also reached VND23,900 per dollar.

Why has the US dollar price escalated?



On the same day, the State Bank of Vietnam (SBV) stated it was ready to intervene in the market if necessary. The agency may sell foreign currencies at low prices to stabilize the forex market.

According to Bui Ngoc Son from the Institute of the World Economics and Politics, investors all over the globe are no longer considering bonds and gold as safe shelters. As they rush to buy dollars, the price of the dollar has increased sharply.

Vietnamese are also trying to keep dollars during the pandemic. 

When the epidemic is contained, investors’ confidence will return. They will withdraw money from shelter channels and pour money into risky assets. As the dollar will no longer be the shelter, the demand will decrease and the exchange rate will return to normal again.

Meanwhile, foreign investors are selling shares in Vietnam. As they are buying dollars in large quantities to transfer money abroad, the dollar price has increased. 


The expert noted that the US FED has taken measures recently, including an interest rate cut to nearly zero percent and an announcement on launching a quantitative easing package. In addition, it also plans to apply a series of unprecedented credit measures targeting households and businesses.

He noted that the FED is applying an emergency measure to cope with the scarcity of the dollar – swapping currencies with nine more central banks for at least six months, together with the existing currency swap plans which have been applied since the 2008 global financial crisis with the five central banks of Canada, the UK, Europe, Japan and Switzerland.

 


Under the currency swap plans, the FED will provide dollars to other central banks in exchange for the local currencies of other countries, and will get back the currencies in the future at a time to be fixed, at the same exchange rates.

“The FED’s measures will help stabilize the market. However, it will depend on the epidemic situation,” Son commented.

When the epidemic is contained, investors’ confidence will return. They will withdraw money from shelter channels and pour money into risky assets. As the dollar will no longer be the shelter, the demand will decrease and the exchange rate will return to normal again.

Son believes that the dollar price is increasing partially because of speculation.

“Speculators think that the dollar price will increase further. They are buying today to sell tomorrow for profit,” he explained.

Son agrees with some analysts that Vietnam may consider applying a currency swap plan with the US. However, he pointed out that Vietnam has unconvertible currency.

Linh Ha 

Vietnamese dollar billionaires’ assets drop, says Forbes

Vietnamese dollar billionaires’ assets drop, says Forbes

The total asset value of Vietnamese dollar billionaires have dropped according to statistics from Forbes.  

Dollar price rises, investors seek shelter amid coronavirus outbreak

Dollar price rises, investors seek shelter amid coronavirus outbreak

The official dong/dollar exchange rate announced by SBV reached a peak of VND23,206 per dollar on February 4, an increase of VND36 per dollar compared with the time before Tet.

 
 

Other News

.
MoIT helps enterprises deal with increasing trade remedy cases
MoIT helps enterprises deal with increasing trade remedy cases
BUSINESSicon  17/10/2020 

Vietnam’s export goods face more trade remedies in the process of deep economic integration, so the Ministry of Industry and Trade has developed solutions for the situation.

ASEAN pushes forward with 5G connectivty cooperation
ASEAN pushes forward with 5G connectivty cooperation
BUSINESSicon  17/10/2020 

As ASEAN chair this year, Vietnam is playing a crucial role in further cementing joint activities within the bloc via boosting the application of high technologies to adapt to Industry 4.0, which is sweeping throughout the region.

Real estate stocks await cash flow
Real estate stocks await cash flow
BUSINESSicon  17/10/2020 

Domestic and foreign capital flow is expected to bolster real estate shares after the COVID-19 pandemic as many investors are paying attention to the industry.

Online exports require professionalism
Online exports require professionalism
BUSINESSicon  17/10/2020 

Using online platforms to boost exports is the fastest way to bring Vietnamese goods to the world, said business leaders and industry experts.

Vietnam to become the 4th largest economy in Southeast Asia: IMF
Vietnam to become the 4th largest economy in Southeast Asia: IMF
BUSINESSicon  17/10/2020 

Vietnam's GDP is estimated to reach US$340.6 billion this year, making it the fourth-largest economy in Southeast Asia.

Many hoteliers intend to divest capital due to heavy losses
Many hoteliers intend to divest capital due to heavy losses
BUSINESSicon  16/10/2020 

Over the past eight months, hotel room tariffs have plunged and hotel room occupancy rates have remained low, forcing several hoteliers to divest capital with many financially weak hotels in the local market being put up for sale.

Meeting expectations of the corporate bond market
Meeting expectations of the corporate bond market
BUSINESSicon  16/10/2020 

A new government decree tightens conditions on the issuance of corporate bonds. However, before the decree came into effect, enterprises flooded the market with new issuances.

M&A activities signal promising fortunes
M&A activities signal promising fortunes
BUSINESSicon  17/10/2020 

Although merger and acquisition levels dropped in 2020 across Vietnam, the prospect for such activities remain bright for next year as overseas investors look to local businesses in order to improve market access.

Thai billionaire, European brewer lose money in Sabeco investment deal
Thai billionaire, European brewer lose money in Sabeco investment deal
BUSINESSicon  16/10/2020 

The Sabeco price has seen a strong recovery in the last half a year, but is still at a low price. Both Thai billionaire and the big brewer Heineken have lost money because of the drop in Sabeco share price.

Investors lose billions of VND as land prices keep rising
Investors lose billions of VND as land prices keep rising
FEATUREicon  17/10/2020 

A lot of real estate traders have missed opportunities to make huge profits because they decided to postpone purchasing plans, hoping that prices would decrease further.

Salary increases in 2020 lowest in 10 years: survey
Salary increases in 2020 lowest in 10 years: survey
BUSINESSicon  16/10/2020 

Salaries increased by 6.5% this year at multinational companies (MNCs) and 5.2% at Vietnamese companies, and are forecast to increase by 7 per cent and 7.7% next year, according to the Talentnet – Mercer Total Remuneration Survey.

The right structural adjustments help Vietnam achieve long-term growth aspirations
The right structural adjustments help Vietnam achieve long-term growth aspirations
BUSINESSicon  17/10/2020 

No nation has escaped the threat of COVID-19 to lives and livelihoods, with many countries seeing cases resurge recently. 

State firms more resilient than foreign, Vietnamese private companies: survey
State firms more resilient than foreign, Vietnamese private companies: survey
BUSINESSicon  15/10/2020 

Business resilience is highly correlated with level of digitisation, the Business Pandemic Resilience Diagnostic conducted by Grant Thornton...

Pandemic a test of fire for Vietnamese enterprises
Pandemic a test of fire for Vietnamese enterprises
BUSINESSicon  15/10/2020 

The COVID-19 pandemic has been a test for Vietnamese businesses as many have been and will be struggling to recover for the foreseeable future. 

Five expy projects unlikely to attract private investors
Five expy projects unlikely to attract private investors
BUSINESSicon  15/10/2020 

Although the National Assembly Standing Committee has given its approval to switch three of the eight subprojects of the North-South Expressway from the public-private partnership (PPP) format into wholly State-invested, 

Only 5% FDI projects in Vietnam use high technologies
Only 5% FDI projects in Vietnam use high technologies
BUSINESSicon  15/10/2020 

Vietnam is home to 32,539 valid foreign direct investment (FDI) projects with registered capital of a combined US$381 billion, of which US$233 billion has been fully disbursed.

The Vietnamese brain will decide
The Vietnamese brain will decide
FEATUREicon  16/10/2020 

"Vietnamese have nothing but brains to develop the country in the future." 

Stable outlook expected for Vietnamese dong
Stable outlook expected for Vietnamese dong
BUSINESSicon  16/10/2020 

While Vietnam is at risk of being listed as currency manipulator by the US, such a risk appears low, as the US will likely continue to reduce its dependence on Chinese exports by reorganizing its supply chain with other partners.

Vietnam banking sector to suffer in 2020 before rebounding in 2021
Vietnam banking sector to suffer in 2020 before rebounding in 2021
BUSINESSicon  15/10/2020 

Fitch Solutions expected credit growth to weaken to 7% in 2020 from 13.7% in 2019, but the growth is predicted to pick up to 12% one year later.

Realising revised growth ambitions
Realising revised growth ambitions
BUSINESSicon  15/10/2020 

Vietnam’s fourthquarter economic outlook is brighter on the back of a rise in domestic consumption and public investment.

. Latest news
     
     
     
    Leave your comment on an article

    OR QUICK LOGIN