Exchange rate inches up at Vietnam central bank, falls at commercial banks

The State Bank of Vietnam (SBV) raised the central exchange rate from VND24,088 to VND24,089 per U.S. dollar on Friday, another record high, but the rates at commercial banks moved in the opposite direction.

As a result, the central exchange rate has risen nearly 2% from end-2022. Per the SBV's trading band of +-5%, commercial banks can set their exchange rates between VND22,619 and VND24,999. The central bank has set the reference exchange rate at VND23,400-25,243.

At state-controlled Vietcombank, one of the country's "Big 4" banks, Friday’s buying and selling rates were VND24,120 and VND24,460 per U.S. dollar, respectively, down from VND23,220 and VND24,560 on Thursday.

BIDV, also a “Big 4” bank, set its buying and selling rates at VND24,120 and VND24,420 on Friday, down from VND24,250 and VND24,550 in the previous day.

The buying rate at VietinBank, another “Big 4” bank, fell to VND24,095 on Friday from Thursday’s VND24,188. The selling rate decreased to VND24,515 from VND24,608 in the same period.

Corresponding figures at Techcombank, a leading private lender, were VND24,145 and VND24,470 on Friday, down from VND24,242 and VND24,562 a day ago, respectively.

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 end-2022 when there was an obvious capital flight driven by widespread fears of collapse in the banking system following the arrests of several businesspeople.

In addition, inbound foreign direct investment was likely to rise this year as Vietnam has succeeded in maintaining its competitive edge. Continued strong dollar supply from remittances will provide additional support to the forex rate, he added.