In an effort to encourage exports in the context of the trade war, the Chinese central bank PBOC has set the yuan/US dollar reference exchange rate at 6.8365 yuan per US dollar, the lowest level since January 2019.

The dong/dollar exchange rate has fluctuated sharply in recent days after the US decided to impose tariff of 25 percent on $200 billion worth of imports from China.

VietNamNet Bridge - The US FED’s ‘less hawkish policy’ on raising interest rate has affected the exchange rate for the Vietnamese dong this year.

The ‘free’ foreign currency market has operated for many years. People go to gold shops to buy and sell dollars every day, even though the transactions are illegal.

VietNamNet Bridge - Turkey, Argentina and other countries have recently witnessed their local currencies depreciating dramatically against dollars. How about Vietnam?

The depreciation of the Chinese yuan against the dollar has raised concerns that Vietnam’s goods will become less competitive in comparison with Chinese goods if Vietnam does not devalue its currency.

VietNamNet Bridge - The currencies of many countries have depreciated sharply against the dollar, thus affecting the competitiveness of Vietnam’s goods.

Experts have urged the government to stop accepting deposits in US dollars from the public, saying that this is a necessary to stabilize the forex market and exchange rate, and fight against dollarization.

A senior official of the State Bank of Vietnam (SBV) on July 4 told Thoi Bao Kinh Te Vietnam that commercial banks had not registered to buy dollars at preferential prices from SBV.

The Vietnamese dong will not depreciate much against the US dollar in the second half of this year, so the whole year’s slide will be 3 per cent at the most, BVSC has forecast.

The US Federal Reserve may adjust the prime interest rate once more, according to Can Van Luc, chief economist of the Bank for Investment & Development of Vietnam (BIDV).

VietNamNet Bridge - The silence of the forex market in 2017 has been broken as the USD appreciated right after the Tet holiday.

VietNamNet Bridge - Contrary to all predictions, overseas remittances to Vietnam in 2017 increased by 10.4 percent, estimated at over $10 billion.

Vietnam maintained a trade surplus of about US$2.7 billion this year, the same figure as 2016, according to the General Statistics Office (GSO).

More than VND33.5 trillion ($1.4 billion) worth of foreign portfolio investment (FPI) in both stocks and bonds were poured into Vietnam in the last three quarters of the year. 

Vietnam needs a gradual sustainable increase in forex reserves, rather than a shocking increase as seen in the last two years, according to analysts. 

VietNamNet Bridge - The decline in remittances in 2016 and the slowdown in the first half of this year has caused concern among economists.

The Government Office last week sent a written document to the central bank governor, referring to the mobilisation of idle gold and foreign currency sources from the people.

Bank deposit interest rates are on the rise. The VN Index has surpassed the 700 point threshold. The real estate market is warming up. Meanwhile, gold and dollar prices are unpredictable.

VietNamNet Bridge - Vietnam economy will encounter more difficulties in 2017 than in 2016 amid global geopolitical changes and financial uncertainties, experts say.