Global volatilities cause Vietnamese currency to depreciate
After a long period of stability, pressure from global markets has caused the Vietnamese dong to depreciate significantly against the US dollar in the past few days.
After a long period of stability, pressure from global markets has caused the Vietnamese dong to depreciate significantly against the US dollar in the past few days.
The VND/USD exchange rates listed by both the central bank and commercial banks have continued on an upward trend.
On Tuesday, the State Bank of Viet Nam set the daily reference exchange rate at VND23,206 per dollar, up five dong from the previous day.
With the current trading band of +/-3 per cent, commercial banks are allowed to apply the ceiling rate for the dollar during the day at VND23,902 and the floor rate at VND22,509.
Most commercial banks also adjusted their rates up.
Vietcombank listed the buying rate at VND23,170 per dollar and the selling rate at VND23,340 per dollar, both up 35 dong from February 3.
BIDV added 30 dong to both rates, with the buying rate listed at VND23,200 per dollar and the selling rate at VND23,340 per dollar.
Techcombank listed the buying rate at VND23,185 per dollar and the selling rate at VND23,325, up 20 dong from the previous day.
The VND/USD rate listed in the unofficial market also increased to VND23,240-23,260 per dollar.
The dollar appreciated against the dong by a total value of VND100 over the past three days.
Despite the rise, supply and demand for the greenback in the domestic market has been stable.
According to analysts from Saigon Securities Incorporation’s research division, while the greenback supply source has remained stable in the domestic market, the appreciation of the dollar against the dong was due to pressure from new volatilities in the international market, especially following the coronavirus outbreak.
The analysts forecast that the domestic foreign exchange market would experience an unpredictable year in 2020.
Besides the volatilities in the global market, experts also predicted after being relatively stable last year, the foreign exchange rate of the dong against the US dollar would face greater pressure this year due to a greenback supply decline in the domestic market following months in the wake of decreasing export and FDI, and higher inflation.
Banking and finance expert Nguyen Tri Hieu forecast the dong would depreciate by between 2 and 3 per cent against the dollar in 2020.
The dong remained relatively stable against the dollar last year, with the SBV’s reference exchange rate up some 1.45 per cent against the end of the previous year. — VNS
