UOB's latest USD/VND forecast is 26,300 in Q4/2025, 26,200 in Q1/2026

Singaporean bank UOB predicted that the USD/VND exchange rate will be on a decline in the coming quarters to 26,300 in Q4/2025, 26,200 in Q1/2026, 26,100 in Q2/2026, and 26,000 in Q3/2026.

Bucking the regional trend, the VND weakened to a record low of 26,436 per USD in August, marking a 3.4% year-to-date decline and setting the stage for a fourth consecutive year of depreciation, the lender said in a report released on Wednesday.

"Looking ahead, the VND may underperform relative to regional currencies in capitalizing on renewed USD softness, which is expected to stem from upcoming Fed rate cuts," UOB added.

The State Bank of Vietnam, the country's central bank, set the daily reference exchange rate at 25,186 VND/USD on Thursday, down VND12 from the previous day.

With the trading band of +/- 5%, the ceiling rate applicable for commercial banks during the day is 26,445 VND/USD and the floor rate 23,926 VND/USD.

At 9 a.m. Thursday, the buying rate at Vietcombank was VND26,165/USD and the selling rate VND26,445, both down VND12 from Wednesday.

At Vietinbank, the buying and selling rates were VND26,189 and VND26,445 respectively, up VND179 and down VND12 compared to Wednesday, respectively.

For VPBank, the respective figures were VND26,205 and VND26,445, down VND6 and VND12 from Wednesday.

Vietcombank and Vietinbank are state-controlled banks and among the Top 4 Vietnamese banks, while VPBank is a leading private bank. The above figures refer to payments via bank transfer, instead of cash.

In a newly-released macroeconomic report, Vietcombank Securities (VCBS) forecasts that in 2025, the Vietnamese dong may depreciate by about 5%. The broker expects the foreign exchange market to be more positive by the end of the year, when the Fed lowers interest rates and trade tensions ease.

Asian FX likely to resume modest recovery once trade tariff uncertainties roll off in Q3/2025

As global trade tensions continue to ease, the tail risks for Asian currencies are also diminishing. Looking ahead, UOB said it expects broad-based USD weakness to re-emerge as the Fed resumes its rate-cutting cycle, guiding USD/Asia lower in the coming quarters.

However, the pace of depreciation may be modest, as Asia’s challenging growth outlook and the dovish stance of regional central banks could temper investor sentiment toward Asian FX.

"This Asian FX strength will be anchored in part by further downside potential in USD/CNY. We see USD/CNY lower at 7.11 in Q4/2025 and 7.02 in Q3/2026."

Vietnam's central bank to hold rates steady amid resilient economic growth

Vietnam’s inflation rate has yet to show a meaningful slowdown, according to UOB. Headline inflation rate hit 3.3% in July, compared to the average of 3.6% in 2024 and 3.26% in 2023.

Main drivers continued to be housing and construction materials (5.9% year-on-year average year to date; 18.8% weight) and health care (18% year-on-year average year to date; 5.4% weight).

Combined with the potential for decent growth prospects in H2/2025 and persistent VND weakness, these factors would constrain the Vietnamese central bank’s (SBV) ability to ease its policy stance. As such, UOB said it expects the SBV to keep its refinancing rate steady at 4.5%.

"If business and labor market conditions deteriorate sharply, there is a possibility for the SBV to cut the refinancing rate in a single step to the Covid-19 low of 4%, though this is not our base case," the bank added.

The World Bank Group in its country economic update released on September 8 said that Vietnam's monetary policy has remained accommodative, as SBV interventions contained foreign exchange pressures and increased credit growth.

Revising up Vietnam's 2025 growth forecast

Vietnam’s real GDP surged 7.96% year-on-year in Q2/2025 (vs. revised 7.05% in Q1/2025), beating UOB's 6.1% forecast. This brought H1/2025 growth to 7.52% year-on-year - the strongest first-half performance since 2011.

The robust first-half showing was driven by a 14% year-on-year export surge, as sentiment rebounded after President Trump lowered the April 2 “Liberation Day” tariff to a temporary 10% baseline rate on trade partners for 90 days. Tariff uncertainty eased in H2/2025 after the U.S. finalized country-specific rates before the August 1 deadline. Vietnam’s rate was set at 20%.

While lower than the initial 46% threat, concerns remain. The 40% transshipment tariff lacks detail, and sector specific rates, specially for semiconductors and furniture, are still pending.

These sectors are critical: electronics (HS 85) made up 31% of U.S. imports from Vietnam in 2024, followed by machinery (HS 84; 21%) and furniture (HS 94; 10%). Tariffs on these could affect more than 40% of Vietnam’s exports to the U.S.

Despite tariff threats and uncertainty, Vietnam’s economy continues to show resilience and dynamism. Export performance has been particularly strong, though risks remain if U.S. demand weakens amid tariff-induced price pressures.

Following the robust 7.5% growth in H1/2025 and expected support from increased government investment, UOB in its latest report revised its full-year GDP forecast to 7.5% (from 6.9% previously; 2024: 7.09%), with Q3/2025 growth at 7.6% year-on-year and Q4/2025 at 7.2%. For 2026, the bank maintains its growth projection at 7%.

In its report released on September 8, the WB said it predicted Vietnam’s GDP growth will moderate to 6.6% in 2025. After strong growth momentum in H1/2025, the Vietnamese economy is expected to cool in the remainder of the year as overall export growth normalizes, it noted.

The Vietnamese government is aiming for GDP expansion of 8.3-8.5% this year.

At a meeting on September 7, the Prime Minister’s Policy Advisory Council argued that the government’s GDP growth target of 8.3-8.5% for 2025 and double-digit expansion for 2026-2030 is "appropriate" in the context of favorable macroeconomic conditions and structural reforms.

Federal Reserve cuts interest rates for the first time in 2025

The Fed on Wednesday approved a widely anticipated rate cut and signaled that two more are on the way before the end of the year.

The Federal Open Market Committee lowered its benchmark overnight lending rate by a quarter percentage point. The decision puts the overnight funds rate in a range between 4%-4.25%.