Will the exchange rate reach a new peak?

Customers conducting transactions at Vietnam Foreign Trade Joint Stock Commercial Bank. *Photo: Nguyen Quang*

An increase of nearly 3% compared to the beginning of the year.

Last weekend, the US dollar reached a new peak when the central exchange rate announced by the State Bank of Vietnam hit its highest level in history: 25,031 VND/USD (June 20). The reference exchange rate at the State Bank of Vietnam's Exchange Transaction Department was also adjusted upwards to 23,830 VND/USD (buying) - 26,232 VND/USD (selling). Compared to the trading session of the previous week (June 13), the central exchange rate increased by 56 dong, and compared to the first trading session of 2025, the exchange rate increased by 696 dong, far exceeding all forecasts...

The central exchange rate "escalated," causing the listed USD prices at commercial banks to also rise in the weekend trading session. Specifically, the listed exchange rates at Vietnam Foreign Trade Joint Stock Commercial Bank (Vietcombank) were 25,892 VND/USD (buying) - 26,282 VND/USD (selling); and at Vietnam Investment and Development Bank ( BIDV ) were 25,922 VND/USD (buying) - 26,282 VND/USD (selling).

Overall for the week, the exchange rate at Vietcombank and BIDV increased by 59 dong in the selling price compared to the end of the previous week. Compared to the opening session of 2025, the listed exchange rate at Vietcombank increased by 671 dong in the buying price and 731 dong in the selling price; at BIDV, it increased by 643 dong in the buying price and 731 dong in the selling price. If experts forecast a 2-3% increase in the exchange rate in 2025, the 3% mark is almost reached with nearly six months remaining in 2025.

In the free market, over the past weekend, the USD exchange rate was commonly traded at 26,310 VND/USD (buying) - 26,410 VND/USD (selling), while the opening rate of 2025 was 25,717 VND/USD (buying) - 25,817 VND/USD (selling), an increase corresponding to the official market.

However, it is noteworthy that the domestic exchange rate has moved in the opposite direction to the global market. While the Dollar Index (DXY), which measures the strength of the USD against other major currencies in the international currency basket, continues to rise, the domestic exchange rate has been steadily increasing. At the end of last week's trading session, the DXY fell 0.26% to 98.65 points, but at the beginning of the year, the index reached 108.53 points. In June, the DXY index at one point fell to its lowest level in the past three years and decreased by nearly 10% compared to the beginning of the year.

The pressure doesn't come from external factors.

Explaining the increase in the domestic exchange rate amidst a decline in the US dollar on the international market, an analysis by a representative of Vietcombank Securities Company (VCBS) indicates that the pressure on the exchange rate does not come from external factors, but mainly from the domestic market. Speculative sentiment towards the US dollar among both individual and institutional investors remains high. This reflects market caution in the absence of official information regarding the outcome of tariff negotiations between Vietnam and the US. The 90-day postponement of retaliatory tariffs imposed by President Trump will end in early July, causing investors to shift towards safe-haven assets such as the US dollar. This further reinforces the sentiment of holding foreign currency and increases pressure from domestic demand.

However, according to VCBS, this speculative sentiment is only short-term during a period of low information regarding the results of tariff negotiations. It is predicted that the exchange rate will show clearer signs of cooling down in the near future as Vietnam continues to demonstrate a solid and stable foundation, remaining an ideal destination for investment capital and production and business activities.

However, many also believe that maintaining exchange rate stability will face numerous challenges this year due to several factors, including the risk associated with reciprocal taxes, which will have a significant impact on the USD/VND exchange rate in 2025. In addition, the State Treasury's continued foreign currency purchases in May (having purchased $1.6 billion since the beginning of the year) and the persistently high interest rate differential between VND and USD are causing the exchange rate to continue its upward trend.

Economist Dr. Can Van Luc believes that the USD/VND exchange rate will increase by approximately 3% in 2025, reflecting the relative depreciation of the Vietnamese Dong against the USD, consistent with global economic developments and internal factors. However, the State Bank of Vietnam will still be able to control exchange rate fluctuations within the permitted range, contributing to macroeconomic stability. Businesses need to closely monitor exchange rate developments to proactively mitigate risks and develop appropriate business plans.

However, there are still some factors that could cause the USD to depreciate, supporting the VND in the short term, such as the deteriorating global trade and economic situation. Recently, the World Trade Organization (WTO) forecasts that the volume of world merchandise trade in 2025 will decrease by 0.2%, the lowest in many years.

Furthermore, if the US Federal Reserve (Fed) lowers interest rates, the attractiveness of the US dollar will also decrease. In addition, another factor affecting the exchange rate is the trend of investors diversifying their asset portfolios, no longer focusing solely on holding USD as before, causing the USD to gradually lose its dominant position in the international market, thereby contributing to a potential downward fluctuation in the USD/VND exchange rate.

Source: https://hanoimoi.vn/ty-gia-se-lap-dinh-moi-706553.html