The State Bank of Vietnam (SBV) increased the central exchange rate to VND23,963 per U.S. dollar on Tuesday, pushing the rate to a new record high in the year to date.
The previous peaks were VND23,954 on August 23 and then VND23,960 on August 28.
The VND/USD rate has risen 0.8% so far this month, from VND23,757 on August 1.
Per the central bank’s (SBV) trading band of +-5%, commercial banks could set their exchange rates between VND22,765 and VND25,161. The SBV set the reference exchange rate at VND23,400-25,111.
Exchange rates at major banks in Vietnam moved in the same direction. At state-controlled Vietcombank, one of the country's "Big 4" banks, Tuesday’s buying and selling rates were VND24,010 and VND24,350 per U.S. dollar, respectively, up from VND23,920 and VND24,260 on Monday.
BIDV, also a “Big 4” bank, set its buying and selling rates at VND24,025 and VND24,325 on Tuesday, up from VND23,950 and VND24,250 a day ago, respectively.
VietinBank, another “Big 4” bank, pegged its buying and selling rates at VND24,015 and VND24,355, up from Monday’s VND23,910 and VND24,330.
Corresponding figures at Techcombank, a leading private lender, were VND24,020 and VND24,365 on Tuesday, up from VND23,950 and VND24,300 the day before, respectively.
The strong appreciation of the USD occurred amidst the SBV’s lowering interest rates for four times so far this year, contrary to the U.S. Federal Reserve's (Fed) tightened monetary policy. The tightening can prompt the hoarding of USD, and in combination with the high seasonal demand for the greenback, can lead to strong increases of the USD in the coming time.