Dollar up again after slight drop

The U.S. dollar at commercial banks has risen against the Vietnamese dong after a slight decrease late last week.

Selling prices are hovering at VND23,850 to VND23,980.

Late last week, U.S. dollar prices dropped slightly after continuously hitting an all-time high as the State Bank of Vietnam raised its regulatory interest rates.

The State Bank's central rate rose by VND10 on Monday morning against late last week to VND23,334 per dollar, which means the dollar price ceiling at commercial banks is set at VND24,034.

The dollar price at Viecombank has advanced slightly by VND5 to VND23,570-23,850. The figure for Vietinbank, another "Big 4" creditor, is VND23,575-23,855.

The rate is unchanged at VND23,830-23,980 per dollar at private lender Sacombank.

On the free market, the rate was unchanged in the morning, at VND24,060-24,130 per dollar.

The U.S. dollar has appreciated by nearly 4% against the Vietnamese dong compared to the beginning of the year.

A report by broker ACB Securities says that despite the Federal Reserve’s continuous interest rate hikes, the price of the Vietnamese dong can stabilize over the rest of the year as inflation is less than 4% and disbursement of foreign direct investment grew 10.5% year-on-year in the first eight months.

Moreover, trade activities continued to be robust, with eight-month turnover reaching $498 billion, up 16% year-on-year, and a trade surplus of $3.96 billion.

With relatively abundant foreign exchange reserves, estimated at $110 billion by the end of the first quarter, ACB Securities estimates the State Bank had sold nearly $20 billion and the remaining reserves are about $90 billion.

Nguyen Tri Hieu, a leading banking expert, told The Investor that the central bank should let the Vietnamese dong depreciate by an additional 1-2% against the U.S. dollar over the rest of the year to support exports and not exert too much pressure on monetary policy.

If the central bank wants to keep the exchange rate stable as it is, it might have to sell an additional $20 billion from foreign exchange reserves, he added.