The US dollar has devalued against the Vietnamese dong in the second quarter of 2020. — VNA/VNS Photo

Firms with US dollar-denominated debts estimate to regain significantly in the second quarter of this year as the US dollar has devalued against the Vietnamese dong in the period after reporting a surge in the first quarter.

In the first quarter of 2020, the USD/VND exchange rate increased by nearly 2 per cent to VND23,644 per US dollar in the context that the global greenback price hit a three-year high with the US Dollar Index on March 20 reaching 102.8, up 6.7 per cent compared to the end of 2019.

The domestic foreign exchange rate was also affected adversely when currencies of many major trading partners of Viet Nam devalued and the domestic market sentiment was hit by the COVID-19 pandemic.

According to experts, the COVID-19 pandemic caused the global financial market to plummet. The need to withdraw capital from risky assets to pour into secure, safe assets was the main reason for the rise of the dollar.

The appreciation of the dollar against the dong in Q1 2020 significantly affected firms with large dollar-denominated loans, causing them to report losses related to the foreign currency exchange rate.

However, the situation has changed since the second quarter. The USD/VND exchange rate has reversed and is continuing on a downward trend. The dollar is currently traded at around VND23,265, down 1.6 per cent compared to the beginning of Q2 2020 because the supply of foreign currencies in the domestic market has been good, especially when the country’s trade surplus is still high.

Therefore, firms with large dollar-denominated loans, such as Binh Son Refinery and Petrochemical Joint Stock Company, Vietnam Aviation Corporation JSC and PetroVietnam Power Corporation, expect to benefit from the move in the second quarter.

On Wednesday, the State Bank of Viet Nam set the daily reference exchange rate at VND23,240 per dollar, down VND9 from the previous day.

With the current trading band of +/-3 per cent, the ceiling rate applied to commercial banks during the day is VND23,937 per dollar and the floor rate VND22,542.

During the day, Vietcombank listed the buying rate at VND23,090 per dollar and the selling rate at VND23,300, both down VND10 from the previous day.

At BIDV, both rates were cut by VND5 to VND23,120 for buying, and VND23,300 for selling.

Techcombank cut VND1 for both rates, listing the buying rate at VND23,104 for buying, and VND23,304 for selling. — VNS