Vietnam brokerage sticks to projection of 2024 VND devaluation at 3%
Hanoi-based Vietcombank Securities has reiterated its forecast that the Vietnamese dong (VND) may depreciate by a “reasonable” 3% against the U.S. dollar this year, narrowing from the year-to-date 5%.

A bank clerk counts USD notes. Photo courtesy of Asia Commercial Bank (ACB).
Since the start of this year, Vietcombank Securities (VCBS) has not changed its projected 3% devaluation of the VND despite the abrupt spike in the USD/VND exchange rate after the Lunar New Year holiday.
“Upward pressures on the USD/VND exchange rate will persist and won’t ease until there is clearer information on the Fed’s interest rate cut roadmap,” the brokerage house said in its macro report released last week.
The firm’s researchers noted that the majority of market participants are inclined to bet that the Fed will make its first rate cut in late Q3 this year.
To relieve the pressure, the State Bank of Vietnam (SBV), the country’s central bank, is continuing to sell the greenback at a spot price of VND24,450 a dollar to commercial banks to meet their forex demands.
Viet Dragon Securities (VDSC) said in its latest macro report last week that the SBV had sold $4.1 billion worth of foreign currency from April 22 to May 27 to rein in the dong’s slide, taking back VND105.5 trillion ($4.15 billion) from circulation.
The SBV may be forced to sell more hard currency to stabilize the USD/VND rate when demand rises in late Q3 and early Q4.
In a base scenario, the USD/VND rate may be anchored at around 25,500, according to VDSC.
The SBV fixed its central reference USD/VND rate at 24,242 on Monday, up VND1 from last weekend. Vietcombank kept its USD price nearly unchanged at VND25,184- 25,454 for bids and asks, respectively.
In addition, the SBV net withdrew a total of VND131.6 trillion ($5.18 billion) through open market operations last month, versus a net injection of VND238.1 billion in April.
Furthermore, the banking regulator also withdrew VND4.3 trillion ($169.22 million) from selling 48,500 taels of gold bars via nine auctions from late April, VDSC researchers added.
They also commented that rising foreign direct investment inflows since the start of this year have supported the SBV’s efforts to prevent the VND from sliding further. However, an increase in import of capital goods has been anticipated to continue in the coming months.
VCBS pointed out that commercial banks increased their deposit interest rates by 20-43 basis points in May, mostly on longer-than-six-month terms.
The firm anticipated deposit interest rates to rise gradually to help narrow the USD-VND interest rate gap. “However, the increase will be moderate, at 50-100 basis points, as lending is picking up slowly, thus there will not be a race to raise rates among commercial banks,” it added.
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