USD prices go up in Vietnam open market, bucking trend at banks

Gold shops in Vietnam’s major cities raised greenback prices by VND60 in both directions from Tuesday to VND25,030-25,130 for respective bids and asks on Wednesday, breaching the VND25,000 psychological threshold.

Meanwhile, commercial banks reduced their USD prices slightly versus a day earlier. Vietcombank, the largest forex trader in the country, quoted the greenback at VND24,310-24,680 in the afternoon, down VND20 from Tuesday, narrowing the reduction by half compared to the morning session.

VietinBank, another state-owned bank, fixed the dollar at VND24,283-24,703, down VND12 on both sides from Tuesday morning trade.

Private lender Techcombank quoted the greenback at VND24,353-24,696, down VND10-13 from Tuesday.

As such, USD buying and selling prices on the black market were around VND700-VND400 higher than at banks, respectively.

The State Bank of Vietnam, the nation's central bank, set the mid-point USD/VND rate at VND23,993 a dollar Wednesday, up VND5 from Tuesday. With a trading band of ±5%, the rate at commercial banks is allowed to move in the range of VND22,793-25,192.

The U.S. Dollar Index (DXY), which measures the strength of the greenback, was trading at 104.06 at 3 p.m. (Hanoi time), down slightly by 0.02%. Traders were waiting for the Fed’s January meeting minutes to be released Wednesday, which could provide insightful information into the ongoing debates around interest rates this year.

Analysts expect the Fed to delay rate cuts until May or June this year. Higher-than-expected consumer price index data last week has dampened hopes for rate cuts in March.

Several securities companies in Vietnam have anticipated the Vietnamese dong to weaken by 1-3% against the U.S. dollar this year.