Central exchange rate tops VND24,000, an all-time high

The State Bank of Vietnam (SBV) increased the central exchange rate to VND24,005 per U.S. dollar on Monday, a record high.

The previous peaks were VND23,991 on September 6 and VND23,993 on September 8.

Since August 1, the USD has risen 1.04% against the VND, according to the central bank’s (SBV) data.

Per the SBV's trading band of +-5%, commercial banks could set their exchange rates between VND22,805 and VND25,205. The central bank set the reference exchange rate at VND23,400-25,155.

Exchange rates at major banks in Vietnam moved in the opposite direction. At state-controlled Vietcombank, one of the country's "Big 4" banks, Monday’s buying and selling rates were VND23,885 and VND24,225 per U.S. dollar, respectively, down from VND23,890 and VND24,260 on Friday.

BIDV, also a “Big 4” bank, set its buying and selling rates at VND23,915 and VND24,215 on Monday, down from VND23,950 and VND24,250 on Friday.

Corresponding figures at Techcombank, a leading private lender, were VND23,915 and VND24,255 on Monday, down from VND23,940 and VND24,278 on Friday, respectively.

However, the exchange rates at VietinBank, another “Big 4” bank, did not move in tandem with the above-mentioned banks. It increased the buying rate to VND23,915 on Monday from Friday’s VND23,900. But the selling rate decreased to VND24,255 from VND24,320 in the same period.

The USD/VND exchange rate is unlikely to undergo major fluctuations in the remaining months of this year, thanks to solid macroeconomic fundamentals, said Tran Ngoc Bau, CEO of Ho Chi Minh City-based financial data provider WiGroup.

The current situation is totally different from that at the end of 2022 when there was an obvious capital flight driven by widespread fears of collapse in the banking system following arrests of several businesspeople, he noted

Bau also pointed out that the US Federal Reserve's (Fed) tightening cycle was nearing its end, helping ease pressures on the Vietnamese dong.

In a release late last month, Ngo Dang Khoa, country head of markets and securities services at HSBC Vietnam, reckoned that the recent dong slide would be short-lived and the currency would bounce back against the greenback in the medium and long term.