In a recent currency market report by Dragon Capital Securities (VDSC), this unit commented on the devaluation of the VND in August 2023. As of August 24, 2023, the USD exchange rate on the interbank market was 1.35% higher than at the end of the previous month and 1.59% higher than at the beginning of the year, surpassing the threshold of 24,000 VND/USD.
The State Bank of Vietnam (SBV) has also continuously adjusted the central exchange rate, with the strongest adjustment last month increasing by 0.82% compared to the previous month.
USD exchange rate may rise to test 24,500 VND/USD, interbank interest rates may increase according to VDSC's forecast (Photo TL)
Explaining the above situation, Rong Viet Securities believes that the cause may come from the recovery of the USD along with some difficulties arising in the Chinese economy . The clearest sign is that the Bloomberg USD strength index has continuously increased in August 2023, reaching 104 on August 24, 2023. This is also the highest level since June 2023.
VDSC forecasts that the USD/VND exchange rate will still be able to test the threshold of 24,500 VND/USD before falling to 24,200 VND/USD by the end of 2023.
In addition, Rong Viet Securities also maintains the view that lending interest rates on the interbank market will increase again at the end of the third quarter and the beginning of the fourth quarter. The reason is that this is the time when capital demand increases again for the peak season at the end of the year.
In fact, as of August 24, 2023, the overnight lending rate was 0.17%/year, down about 0.2% compared to the end of July 2023. The 1-2 week interbank interest rate also decreased by 8-22 basis points to 0.43% and 0.48%/year. The 1-month interbank interest rate continued to decrease by another 44 basis points to only 1.69%/year.
The reason explained by VDSC is that the State Bank did not participate in pumping/withdrawing money on the open market in August.
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