Vietnam central bank raises USD price to VND23,825, close to year-high

The State Bank of Vietnam (SBV) increased the central exchange rate to VND23,825 per U.S. dollar on Friday, bringing the rate close to the highest level this year at VND23,833 on July 7-8.

The raise was the third in a row, starting from VND23,757 on Tuesday, VND23,773 on Wednesday, and VND23,803 on Thursday. It took place amid the strong performance of the U.S. Dollar Index, reaching a four-week high of 102.84 on Thursday.

Per the central bank’s (SBV) trading band of +-5%, the move means commercial banks can set their exchange rates between VND22,633 and VND25,016.

On the same day, the SBV set the reference exchange rate at its operation center at VND23,400-24,943.

Exchange rates at major banks in Vietnam moved in the opposite direction on Friday. At state-controlled Vietcombank, one of the country's "Big 4" banks, Friday’s buying and selling rates were VND23,550 and VND23,890 per U.S. dollar respectively, down from VND23,580 and VND23,920 on Thursday.

BIDV, also a “Big 4” bank, set buying and selling rates at VND23,595 and VND23,895, down from VND23,605 and VND23,905 a day ago, respectively.

VietinBank, another “Big 4”, set its buying rate at VND23,558, up from VND23,548 on Thursday, but its selling rate was VND23,898, down from VND23,968.

The figures at Techcombank, a leading private lender, were VND23,568 and VND23,940, versus VND23,596 and VND23,931 the day before, respectively.

The State Bank of Vietnam (SBV) cut its refinance and discount rates by 50 basis points from June 19 to spur the country’s growth amid prolonged global economic headwinds. The refinance rate will be cut to 4.5%, the discount rate to 3%, and the overnight electronic interbank rate to 5%. It is the central bank’s fourth policy rate adjustment this year.

The central bank may deliver another 50 basis points rate cut, also the last one in the ongoing easing cycle, HSBC said in its July Vietnam macro economic review.