The State Bank of Vietnam (SBV) on Monday raised the central exchange rate by VND8 to VND24,004 per U.S. dollar, breaking the VND24,000 milestone and approaching the peak of VND24,110 in October 2023.
Per the SBV's trading band of +-5%, the reference exchange rate of VND23,400-25,243 means commercial banks can set their exchange rates between VND22,804 and VND25,204.
The Vietnam dong depreciates amid persistant pressures. KB Securities Vietnam (KBSV) attributed the trend to the significant interest rate gap between USD-denominated and VND-denominated loans and the upward trend of the U.S. Dollar Index (DXY) together with high geopolitical tensions.
The exchange rate has moved in the same direction at commercial banks. In late Monday afternoon, state-controlled Vietcombank, one of the country's "Big 4" banks, set its buying and selling rates at VND25,510 and VND24,850 per U.S. dollar, respectively, up from VND24,450 and VND24,790 a day earlier.
At BIDV, another “Big 4” bank, the buying and selling rates were VND24,545 and VND24,855 on Monday afternoon, respectively, up from VND24,495 and VND24,805 the previous day.
At another “Big 4” VietinBank, the buying rate went up to VND24,522 on Monday from Saturday’s VND24,430; while the selling rate increased to VND24,862 from VND24,850.
Corresponding figures at Techcombank, a leading private lender, were VND24,535 and VND24,845 on Monday, higher than the VND24,490 and VND24,810 recorded on Saturday.
VND is likely to devalue 1.5% against the U.S. dollar this year to VND24,600 as upward pressures persist, KB Securities Vietnam predicted in a report.
Meanwhile, Vietcombank Securities (VCBS) forecast that the dong would devalue around 3% against the U.S. dollar this year, a similar magnitude to that seen in 2023, as depreciation pressure lingers.