Central rate stable, free market rate drops sharply

In the first session of the week, the State Bank adjusted the central exchange rate up by 5 VND, to 24,960 VND/USD, the reference exchange rate at the State Bank Transaction Office also increased to 23,762 VND/USD (buy) - 26,158 VND/USD (sell).

Exchange rate on the free market has dropped sharply. Illustrative photo

At the closing session of the week, the Joint Stock Commercial Bank for Foreign Trade of Vietnam (Vietcombank) listed the exchange rate at around 26,130 - 26,150 VND/USD, a slight increase of 10 VND compared to the beginning of the week and an increase of 20 VND compared to the previous week. Meanwhile, the Joint Stock Commercial Bank for Investment and Development of Vietnam ( BIDV ) listed the exchange rate at 25,775 - 26,135 VND/USD, a slight increase of 25 VND in both directions compared to the beginning of the week.

In the free market, from 26,420 VND/USD at the beginning of the week, the exchange rate decreased to 26,380 VND/USD at the end of the week, equivalent to a decrease of 40 VND during the week and a decrease of 170 VND compared to the end of the previous week. Thus, contrary to concerns, the supply of USD in the market is quite abundant, there are no major fluctuations in the currency market.

In the international market, the DXY index measuring the greenback's fluctuations against 6 major currencies in the world's currency "basket" decreased by 0.67%, reaching 99.17 points. The greenback continued to have a week of decline as economic organizations and investors reacted to the US's tariff policies.

But in the opposite direction, the EUR, GBP (British Pound), JPY (Japanese Yen) and CAD (Canadian Dollar) all recorded gains. Specifically, the EUR/USD exchange rate increased by 1.133; GBP/USD increased to 1.3488, the highest level since February 2022, after the UK CPI unexpectedly increased in April, reducing expectations of a rate cut by the Bank of England in the near future.

Experts also said that the recent decline in the USD reflects the cautious stance of US Federal Reserve (FED) officials, along with expectations that in the context of gradually removing high tariffs, the US has less incentive to maintain a strong USD.

With EUR at the end of last week, the EUR exchange rate at Vietcombank reached 30,170.45 VND/EUR, an increase of 327 VND compared to the beginning of the week, reversing the decrease of 170 VND compared to the same period last week.

Experts from VPBank Securities Joint Stock Company (VPBankS) said that the State Bank has adjusted the central exchange rate many times since the beginning of 2025. Along with that, the Government is strengthening control of origin fraud and diversifying the market to minimize risks from the US tariff policy.

In the coming time, the VND/USD exchange rate will continue to be under pressure from global economic and political instability and changes in international trade policies, although the USD shows signs of cooling down as the market expects the FED to cut interest rates by the end of the third quarter of 2025.

Domestically, although the State Bank maintains a flexible management policy, combined with timely intervention through foreign currency futures, pressure from peak season import demand, along with FDI capital flows that are not completely stable and the risk of weakening the trade balance make it difficult for VND to maintain its value.

Thanks to the pressure of the falling exchange rate, the State Bank has returned to "net withdraw" 1,325.15 billion VND, while through the open market, it has supplied 24,953.82 billion VND. Along with that, the volume of matured mortgage loans is 26,278.97 billion VND, causing the total capital circulating in the open market to decrease to 44,901.5 billion VND.

Interbank interest rates have fluctuated around 4% per year for most terms since April. Last week alone, interbank interest rates showed slight differentiation between terms, reflecting the adjustment of supply and demand for liquidity in the market.

Accordingly, the overnight interest rate increased to 3.86%, up 8 basis points compared to the end of last week. The 1-week term interest rate also increased slightly to 3.95% (up 3 points). The 1-month term increased sharply to 4.30% (up 17 points). On the contrary, the 2-week term decreased slightly to 4.11% (down 2 points). For the longer term, the 3-month interest rate remained stable around 4.61 - 4.74%, ending the week at 4.61%, down slightly by 1 point.

Experts believe that the exchange rate still has many potential risks due to global political and economic tensions, so the regulatory agency will flexibly use many tools such as operating interest rates, required reserve ratios and open market operations to maintain abundant liquidity for the banking system, while keeping lending interest rates at a reasonable level, encouraging businesses to invest in expanding production and business...

Source: https://hanoimoi.vn/ty-gia-trung-tam-on-dinh-ty-gia-tren-thi-truong-tu-do-giam-manh-703369.html