Exchange rates are in a pincer movement.

Exchange rate pressure is increasing as the US dollar strength index (DXY) surpasses 100 points. Furthermore, the possibility that the US Federal Reserve (Fed) may not be able to lower interest rates anytime soon in the first half of 2026 due to inflation risks is also adding pressure on the exchange rate.

The selling rate of USD at banks continues to hit the ceiling - Illustration photo: NGOC PHUONG

As of the afternoon of March 18th, the US dollar on the free market was quoted at 27,400 - 27,450 VND/USD for buying and selling respectively. Meanwhile, the selling rate at banks consistently remained at the upper limit of the permitted range, commonly around 26,320 VND, while the buying rate was approximately 26,050 VND.

Notably, before the Lunar New Year, the exchange rate fell to its lowest level of 25,860 VND/USD thanks to positive capital inflows from remittances and FDI, persistently high capital costs, a weakening DXY index, and a cooling free market.

However, after the Lunar New Year, the USD/VND exchange rate quickly rebounded following the outbreak of tensions between the US, Israel, and Iran.

According to research by Vietcombank Securities (VCBS), the upward trend of the DXY will put significant pressure on the USD/VND exchange rate in the near future, especially as the market expects the Fed to maintain high interest rates for longer, and even does not rule out the possibility of tightening again if inflation persists.

Furthermore, the risk of imported inflation is also increasing as the USD strengthens along with high energy prices. Vietnam could face a double impact from exchange rate fluctuations and international commodity prices, thereby putting pressure on the consumer price index (CPI) in the coming quarters if geopolitical tensions persist.

Ms. Tran Thi Khanh Hien, Director of Analysis at MB Securities (MBS), believes that exchange rate pressure is increasing as the DXY index surpassed the 100-point mark and reached 100.36 points by mid-March, the highest level in 10 months, a 2.1% increase compared to the beginning of the year.

Given that the Fed is not expected to lower interest rates anytime soon, MBS forecasts that the USD/VND exchange rate will fluctuate around 26,200 - 26,400 VND in the first and second quarters of 2026, representing an increase of approximately 0.5% compared to the beginning of the year.

In fact, this week, the USD on the free market exceeded 27,400 VND/USD, while the selling rate at banks continuously increased to its ceiling.

Another important variable closely linked to the exchange rate is inflation. In the early days of March, the average domestic gasoline price increased by 32.3% compared to the previous month and by 29.1% compared to the same period last year.

According to the baseline scenario, assuming an average domestic gasoline price of approximately 24,800 - 24,900 VND/liter, core inflation is projected to rise to 4.3 - 4.5% in the third and fourth quarters. Consequently, the average consumer price index (CPI) for 2026 is forecast to increase by approximately 4 - 4.3% year-on-year.

Mr. Dong Thanh Tuan, an expert atACB Securities (ACBS), expects that in the second half of 2026, the State Bank of Vietnam will tend to loosen monetary policy more than in the first half of the year in order to support growth targets.

Inflationary and exchange rate pressures may increase compared to previous years. However, systemic risks are assessed as being better managed, as liquidity pressure from the real estate market has eased.

BINH KHANH

Source: https://tuoitre.vn/ti-gia-trong-the-gong-kim-20260319083639477.htm