The State Treasury has offered to buy a total of US$500 million from commercial banks in the past three weeks. Photo nguoiquansat.vn

 

High demand for the US dollar from the State Treasury could continue to cause the USD/VNĐ exchange rate to increase.

 

The State Treasury has offered to buy a total of US$500 million from commercial banks in the past three weeks.

 

The purchase of the dollar took place in the context that the USD/VNĐ exchange rate at banks has recently increased rapidly. As the demand for the greenback in the market remains high, the purchase of the large amount of dollar will continue to strengthen the rise of the exchange rate.

 

Previously, the SBV also said that the USD/VNĐ exchange rate was under a lot of pressure in 2024, partly due to the Ministry of Finance’s high demand for the dollar to pay foreign debts.

 

Currently, the dollar listed at banks is fluctuating around VNĐ25,700 per dollar for selling and VNĐ25,300 for buying.

 

Compared to the closing price before the Lunar New Year holiday, the dollar selling price at banks has increased by about VNĐ400 per dollar, while the buying price has risen by about VNĐ600. Thus, within just half a month, the USD/VNĐ exchange rate listed at banks has increased by between 1.6-2.4 per cent.

 

The USD/VNĐ exchange rate on the interbank market is also fluctuating, around VNĐ25,500 per dollar.

 

The USD/VNĐ exchange rate at banks has continuously increased in the context that the SBV has strongly raised its central exchange rate. Since the Lunar New Year holiday, the SBV’s central exchange rate has increased by a total of VNĐ321 per dollar - a very strong adjustment compared to the increase of VNĐ469 across the whole 2024.

 

Experts forecast the SBV will not use the nation’s foreign exchange reserves to sell the dollar to intervene the exchange rate at the present time.

 

The SBV had to sell more than $9 billion in 2024 and the nation’s foreign exchange reserves is currently at the limit according to the IMF's recommendation on minimum foreign exchange reserves.

 

Under a 2025 outlook report released recently, experts from Vietcombank Securities Company (VCBS) forecast a strong US dollar will still be a major factor influencing the USD/VNĐ exchange rate in 2025, causing the Vietnamese đồng to depreciate by about 3 per cent against the dollar.

 

According to VCBS’s analysts, the dollar index (DXY) may remain at a high level and may last longer than expected. At the same time, the main trend of central banks around the world is to lower interest rates to stimulate economic growth.

 

In addition, the US Federal Reserve (Fed) is likely to delay cutting interest rates longer than expected, that will also cause the dollar to be stronger for longer than other currencies.

 

Geopolitical conflicts will also lead to investment demand in safe-haven assets and the dollar may be the preferred asset. — BIZHUB/VNS