Foreign currency transactions at VPBank in Ha Noi. — VNS Photo Tygiavang

HA NOI (Biz Hub) — US dollar rates soared at local commercial banks yesterday, continuing the trend from last week.

The greenback has become stronger in the global market during recent months, coupled with the recovery of the world's biggest economy, while the Euro had started dropping against the dollar since the middle of 2014 as the European Central Bank decided to pump new money into a sagging economy through a monthly bond buying programme.

The foreign exchange market is also watching the Federal Reserve (Fed) ‘s two-day meeting, beginning today, as well as its intention to raise interest rates for the first time since 2006.

Yesterday, most commercial banks sold the dollar in the range of VND21,480 to VND21,550.

The Sai Gon Commercial Bank had the highest selling rate yesterday, at VND21,550 for a dollar, VND60 higher than last Saturday's rate, while the buying rate remained unchanged at VND21,340.

Vietcombank raised the dollar buying rate by VND115 to VND21,460 and the selling rate by VND125 to VND21,520. BIDV had also applied the same exchange rates at Vietcombank yesterday.

The buying and selling rates were VND21,470 and VND21,530 at Vietinbank, VND120 and VND110 higher than last Friday, respectively.

This reflected a considerable surge in the VND/USD exchange rate from the beginning of this year.

The uptrend started late last week, in view of the surging dollar in the world market and a rumour that the central bank could raise the exchange rate by a 1 per cent margin.

However, the rumour was denied by industry insiders, adding that supply and demand in the foreign currency market would remain normal, cafef.vn reported.

The current inter-bank exchange rate was pegged at VND21.485 after being raised by 1 per cent on January 7.

Vietcombank Securities in its February macro-economy report said the foreign exchange market would stabilise during the first half of this year, adding that the exchange rates were not expected to be adjusted during the period, given the country's trade surplus and low inflation.

Vietcombank Securities does not expect the Fed to raise interest rates during the first half of this year.

However, according to BIDV Securities, the VND/USD exchange rate might be adjusted as the greenback was becoming stronger against many other currencies, such as the Euro, which had dropped by a hefty 25 per cent against the dollar since mid-2014.

The State Bank of Viet Nam plans to increase the VND/USD exchange rate by not more than 2 per cent in 2015. — VNS