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Update news dong/dollar exchange rate
The USD/VND exchange rate has seen notable developments in the first month of 2024 when it increased significantly in both official and free markets.
With the internal strength of the currency and the central bank's flexible management, the VND is expected to depreciate by a maximum of 3% in 2022.
The Government's outstanding debt by the end of 2022 is estimated to decrease by about VND57 trillion, down 2 percent compared to the outstanding balance at the end of 2021.
VietNamNet Bridge - As the State Bank of Vietnam (SBV) pursues a stable dong/dollar exchange rate policy, the depreciation of the US dollar in the world market will also lead to the weakening of the dong.
VietNamNet Bridge - The gold and dollar markets worth tens of billions of dollars have remained stable despite fluctuations in the world market.
If the US Fed raised the prime interest rate, the overseas remittance (kieu hoi) flow to Vietnam would slow down, the dong would depreciate, and the dong interest rate would increase. The decision will also change international capital flow.
VietNamNet Bridge - The sharp appreciation of the US dollar after the news about the US election and the fall of the Chinese yuan to a 6-year low could create risks for Vietnam’s economy.
VietNamNet Bridge - “The world is trying to run away from the yen, but Vietnam seems to go in the opposite direction,” Le Xuan Nghia, member of the National Finance & Monetary Advisory Council, said.
Analysts have warned that the kieu hoi flow (overseas remittance) to Vietnam would slow, while Vietnamese may deposit dollars at Laos banks instead of Vietnamese as a result of the State Bank’s zero-percent interest rate policy.
VietNamNet Bridge - At least two financial institutions have predicted that the dong will continue depreciating against the US dollar.
VietNamNet Bridge - Economists have repeatedly advised the government not to rely on a weak dong policy when trying to compete with Chinese products as demand in China is falling.
VietNamNet Bridge - Analysts warned that dollar price fluctuations would prompt foreign investors to withdraw capital from Vietnam. If so, this would put pressure on the exchange rate.
Dollar rates soared in the flea market and touched the latest ceiling rate set by the State Bank of Viet Nam in commercial banks August 24.
VietNamNet Bridge - Some international institutions have predicted that the dong will depreciate by 5 percent this year, while economists have urged the government to devalue the currency by more than 10 percent.
VietNamNet Bridge - The Chinese yuan depreciation will affect Vietnam’s economy as the country is Vietnam’s third largest trading partner.
The watchdog agency has reassured the public, saying that the dong/dollar exchange rate will not lose more than 2 percent of value by the end of the year and that the foreign exchange reserves have reached $37 billion.
The dollar price on May 6 hit the ceiling of VND21,673 per dollar, the highest ever level. The State Bank once again attributes this to people’s anxiety. Experts believe the dong 2 percent devaluation plan in 2015 is not feasible.
VietNamNet Bridge - The dollar price has been increasing for a month, while the official dong/dollar exchange rate remains unchanged as the State Bank has committed not to devalue the dong by more than 2 percent in 2015.
VietNamNet Bridge – The dollar price has been appreciating against the Vietnam dong like other currencies but analysts believe the State Bank will not adjust the dong/dollar exchange in the first half of the year.
The State Bank of Vietnam (SBV) unexpectedly devalued the dong by one percent starting on January 7, 2015. It will now have the right to devalue the dong again by only one percent within the year.