VND/USD exchange rate cools down but remains high

The exchange rate continued to fluctuate continuously last week. Even when there was a tendency to stagnate or decrease slightly, going against the world trend, the USD/VND exchange rate was still "anchored" at a fairly high level.

There are signs of "cooling down"

Last week, the USD/VND exchange rate decreased slightly in both the official and free markets, while the EUR exchange rate also cooled down after a sharp increase due to great pressure from the VND - USD interest rate gap.

Meanwhile, the DXY index measuring the USD against a number of other currencies in the world recovered slightly.

The USD/VND exchange rate remains "anchored" at a high level. Illustrative photo

On the weekend, the central exchange rate was listed by the State Bank at 24,951 VND/USD, the reference exchange rate at the State Bank's Transaction Office was 23,754 VND/USD (buy) and 26,148 VND/USD (sell).

The exchange rate listed at commercial banks is commonly at 25,760 VND/USD (buy) - 26,150 VND/USD (sell). In the free market, the exchange rate is around 26,375 VND/USD (buy) - 26,475 VND/USD (sell).

Thus, in general, last week, the central exchange rate decreased slightly by 5 VND; in which, only the weekend session increased by 24 VND, the remaining sessions decreased.

The USD exchange rate at commercial banks also experienced a week of cooling down, decreasing by about 30 VND in the selling price. The exchange rate on the free market last week also fluctuated in the same direction, decreasing by 35 VND.

In the international market, the DXY index, a measure of the strength of the USD compared to major currencies in a currency basket, increased slightly, surpassing the 100-point mark, after hitting bottom in April. However, this is still a three-year low and down about 10% compared to the beginning of the year.

According to experts, the US Federal Reserve (FED)'s decision to keep the reference interest rate at 4.25 - 4.5%, as well as the trade agreement reached between the US and the UK, raised expectations of easing global trade tensions, contributing to the recovery of the USD in the world market.

For EUR, the selling rate at commercial banks cooled down, down about 200 VND/EUR after a sharp increase in April, at nearly 2,000 VND/EUR, up 7%, to about 30,500 VND/EUR.

In the international market, since the beginning of the year, the EUR has increased to a three-year high against the USD, in the context of market volatility due to tariff policies, investors selling off US assets and seeking safety in safe haven currencies.

Along with the euro, other currencies also gained against the greenback, especially traditional safe-haven currencies such as the Swiss franc and the Japanese yen.

Explaining the reason why the domestic exchange rate has not "cooled down" even when the USD price on the world market is low, down sharply by 9.7% compared to the peak in 2025, experts said that it is because the demand for foreign currency of domestic enterprises tends to increase sharply.

In addition, interbank interest rates fell sharply to a 13-month low at the end of April, causing the VND-USD interest rate gap to reverse to negative levels, reaching its highest level since the beginning of the year.

These factors have put significant pressure on the exchange rate, causing the USD/VND exchange rate on the interbank market to increase by 1.4% compared to the end of March and 2.1% compared to the beginning of the year.

The exchange rate on the free market also increased by about 2.8%, while the central rate announced by the State Bank increased by 2.5% compared to the beginning of 2025.

The exchange rate is forecast to fluctuate between 25,500 - 26,000 VND/USD.

MBS Securities Joint Stock Company forecasts that the exchange rate will fluctuate between 25,500 - 26,000 VND/USD in 2025. Fiscal easing plans, combined with tighter immigration policies, along with high interest rates and relatively high protectionism in the US will support the increase in the value of the USD.

Although there are "pushing forces" causing the exchange rate to increase, on the contrary, there are still many "pulling forces" that help cool down and keep the exchange rate stable. Typically, internal factors still record positive results and are expected to continue to support VND.

Faced with increasing exchange rate pressure, the State Bank withdrew net liquidity in April with a total estimated value of nearly VND22.2 trillion.

Despite net withdrawal moves from the operator, overnight interbank interest rates, after remaining around 4-4.4% in the first half of April, fell sharply to a 13-month low, reaching 2.2% on April 25, showing that the system's liquidity is in excess.

This development significantly affected the VND-USD interest rate differential, putting pressure on the exchange rate. Accordingly, from the beginning of the year to the first half of April, the USD overnight interest rate was only 0.2 - 1.2% higher than VND, but by the end of the month, this difference increased sharply to 2.1% per year, the highest level since the beginning of the year. By the end of the month, the overnight interest rate was at 3.8%, while interest rates for terms from 1 week to 1 month fluctuated around 3.9 - 4.1%.

Currently, the State Bank is stepping up the supply of liquidity to the market through the open market channel (OMO), with a volume of VND38,094.34 billion last week.

In the interbank money market, the average overnight interbank VND interest rate remained below 4%, but increased sharply compared to the end of April (2.46%) at 3.96%; 1 week 4.03%; 2 weeks 4.23%; 1 month 4.84%; 3 months 4.82%.

Source: https://hanoimoi.vn/ty-gia-vnd-usd-giam-nhiet-nhung-van-o-muc-cao-701918.html