The central exchange rate has sharply rebounded after two weeks of easing. On the morning of 15/9, the State Bank of Vietnam (SBV) increased the reference rate for the US dollar to 25,617 dong. This marks a 10-dong rise from yesterday and exceeds the previous record of 25,615 dong, which was set on 25/8 and repeated on 3/9.
The SBV's significant increase in the central exchange rate comes as the US Federal Reserve (Fed) prepares to announce its interest rate decision following its meeting today and tomorrow. Numerous domestic and international institutions anticipate the Fed will raise interest rates by 25 basis points, which would be the first such hike since 2023.
"The Fed's decision is the primary influencing factor for the DXY index, which measures the US dollar's strength, and the USD/VND exchange rate this week", stated analysts from Yuanta Vietnam Securities Company in a currency report published yesterday.
Echoing this sentiment, the VietinBank Foreign Exchange Business Center suggested that the market could experience significant volatility around the Fed's announcement. A more hawkish message from the Fed than anticipated could lead to a further strengthening of the US dollar.
The SBV updates the central exchange rate daily, calculating it based on interbank market developments, the currency basket of major trade partners, macroeconomic balance, and policy objectives. This rate acts as a reference for commercial banks to adjust their actual transaction prices within a 5% margin.
This morning, commercial bank USD prices moved in line with the central exchange rate. Vietcombank, Vietinbank, and Eximbank each increased their US dollar rates by 20-40 dong, with current buying and selling prices ranging from 25,810 to 26,220 dong. Banks continue to keep a relatively wide margin from the permitted ceiling and floor trading levels.
The US dollar price also saw a slight increase in the free market. Several foreign exchange counters in Ho Chi Minh City reported buying and selling rates between 25,700 and 26,000 dong. This represents a 30-dong increase from earlier this week, though these rates remain lower than those offered by commercial banks.
Yuanta Vietnam Securities Company indicated that the US dollar's performance in the final months of the year largely depends on whether the Fed continues to signal monetary tightening.
Should the Fed either maintain interest rates or implement a hike while conveying a cautious outlook on future adjustments, the domestic exchange rate might remain stable, supported by favorable foreign currency supply and demand. However, global monetary policy tightening pressures are broadly escalating. This trend is expected to be less favorable for emerging currencies, including the Vietnamese dong.
Phuong Dong
