USD exchange rate forecast to decrease in the second half of the year
At the close of last week (July 11), the State Bank announced the central exchange rate at 25,128 VND/USD, down 3 VND compared to the previous session. With a margin of +-5%, the ceiling exchange rate is 26,384 VND/USD and the floor exchange rate is 23,872 VND/USD.
The reference exchange rate at the State Bank of Vietnam is 23,922 VND/USD (buy) and 26,334 VND/USD (sell). Meanwhile, the listed exchange rate at commercial banks is around 25,900 VND/USD (buy) - 26,290 VND/USD (sell). In the free market, the exchange rate is 26,400 VND/USD (buy) - 26,490 VND/USD (sell).
Thus, from July 7 to 11, the central exchange rate increased by 12 VND, while the exchange rate at commercial banks decreased by about 60 VND in both buying and selling directions.
Along with commercial banks, the exchange rate on the free market also decreased by 30 VND. Previously, the exchange rate on the free market increased by 195 VND a week.
In the international market, the DXY index, which measures the "health" of the USD compared to 6 other major currencies in the currency basket, stood at 97.74 points, up 0.8% compared to the closing level last week. Thus, the USD is gradually recovering slightly after falling 12% in the first half of the year, the biggest decline since 1973.
Experts say the greenback is under pressure from US policies as the budget deficit continues to grow. And perhaps most worryingly, the lack of consistency and unpredictability in tariff policy.
Experts from MB Securities Joint Stock Company (MBS) said that the USD is expected to continue to decrease from now until the end of the year when the US Federal Reserve (FED) is expected to start cutting interest rates, internal problems will be the main factor contributing to increasing pressure on the exchange rate.
The VND-USD interest rate gap may continue to widen as deposit interest rates still have room to decrease in the third quarter, while the federal funds rate is forecast to decrease only from September due to the stable US labor market and persistent inflationary pressures.
In fact, the important buffer for the USD/VND exchange rate is exports, which are expected to slow down as most businesses complete deliveries before the tariff deferral deadline (July 9), leading to a possible decrease in international demand in the coming time. The exchange rate is forecast to fluctuate between 26,600 - 26,750 VND/USD by the end of the year, corresponding to an increase of 4.5 - 5% compared to the beginning of the year.
Other currencies also fluctuated.
With other foreign currencies, at the Joint Stock Commercial Bank for Foreign Trade of Vietnam ( Vietcombank ), the EUR turned to decrease sharply, closing the week at 30,052 VND/EUR (buy) - 30,076 VND/EUR (sell), down 337 VND for buying and 367 VND for selling compared to last week.
The British Pound (GBP) is listed at 34,476 VND/GBP (buy) - 35,939.89 VND/GBP (sell), down more than 400 VND in both directions; the Japanese Yen (JPY) is 171.69 VND/JPY (buy) - 182.6 VND/JPY (sell).
The State Bank continues to flexibly manage open market operations, ensuring liquidity for the system. Accordingly, last week, interbank interest rates increased slightly after a sharp decrease the previous week. Specifically, on July 9, overnight interest rates increased sharply by 0.57%, to 4.65%/year; 1-week term also increased by 0.4%, to 4.65%/year; 2-week term increased by 4.72%/year, up 0.47%; 1-month increased by 0.49% to 4.91%/year; 3-month term increased by 4.75%, the lowest increase of 0.15%/year.
For the open market, last week, in the mortgage channel, the State Bank offered 7-day and 91-day terms at an interest rate of 4%/year. There were 71,096.25 billion VND in winning bids for both terms; 61,705 billion VND matured on the mortgage channel.
The State Bank bid for 7-day term bills and interest rate bids, resulting in 21,400 billion VND winning the bid with an interest rate of 3.35 - 3.45%/year, with 17,400 billion VND of bills maturing.
According to experts, the treasury bill channel was restarted at the end of June to raise the interbank interest rate level to support the exchange rate. In fact, the overnight interbank interest rate has continued to maintain a sharp downward trend, even hitting a 15-month low of 1.3%/year on June 23.
Thus, the State Bank injected a net VND5,391.59 billion into the market last week through the open market channel. There were VND104,001.2 billion circulating on the mortgage channel, and VND21,400 billion of State Bank bills circulating on the market.
Source: https://hanoimoi.vn/ty-gia-usd-cham-dut-nhieu-tuan-tang-lien-tiep-708896.html
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