The US dollar on March 25 depreciated against the Vietnamese dong after the State Bank of Vietnam (SBV) sold the greenback on the cheap to stabilise the local foreign exchange market.

 After a long period of stability, pressure from global markets has caused the Vietnamese dong to depreciate significantly against the US dollar in the past few days.

After being relatively stable last year, the foreign exchange rate of the Vietnamese dong against the US dollar is forecast to be under greater pressure in 2020 due to both internal and external headwinds.

The VND was expected to remain broadly stable against the USD over the remainder of 2019 and to be slightly weaker on average over 2020, buoyed by robust FDI inflows, dollar purchases by businesses, and a healthy foreign reserve position.

The Vietnamese dong has gained some strength against the US dollar in the past month, helped by abundant domestic supply and favourable global conditions.

VietNamNet Bridge - The depreciation of the euro against the greenback amid a struggling European economy has begun to worry Vietnamese exporters.

 VietNamNet Bridge – The price fluctuations of the US dollar, euro, Japanese yen and Korean won have helped many businesses prosper and hurt others.

 VietNamNet Bridge – The US dollar price has unexpectedly been increasing in recent days, but the nominal exchange rate remains unstable. Economists believe an adjustment of the exchange rate would not boost exports.

 VietNamNet Bridge – Travel agencies complain that it is difficult to attract foreign travelers from some markets because of the depreciation of many foreign currencies against the dollar, which has made tours more expensive.

VietNamNet Bridge - Financial institutions believe the dong will depreciate further in the last months of the year after losing one percent of value since mid-June.

The State Bank of Viet Nam has said that it would closely monitor exchange rate movements and balance of payment figures to manage the rate in a manner that would encourage dong holdings and limit shifting to US dollar holdings.

 VietNamNet Bridge – The dollar price has been increasing these days because of the slight demand increase. However, the dong/dollar exchange rate is believed to get stabilized by early July 2013.

Experts are calling on the Government to devalue the Vietnamese dong by three to four per cent against the US dollar, saying this adjustment would provide much-needed relief to export firms.