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Declining USD Prices: Banks and Free Market Suffer Declines

Approaching Tet holidays, the USD price in banks and the free market dropped significantly, despite the international USD index maintaining a high level.

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On February 1st, the central exchange rate was set at 23,991 dong/USD by the State Bank of Vietnam, significantly lower than yesterday and falling below the 24,000 dong/USD threshold. The USD exchange rate at commercial banks has been continuously cooling down over the past few days.

Vietcombank is currently buying USD at 24,250 dong/USD and selling at 24,590 dong/USD, a decrease of 5 dong/USD compared to yesterday.

Sacombank has posted the buying rate for USD at 24,265 dong/USD and selling rate at 24,570 dong/USD.

Over the past 3 days, the USD rate at commercial banks has dropped by approximately 125 dong. If looking at the past week, the USD has continuously decreased by 175 dong (-0.07%).

Not only in banks, but also on the free market, the US dollar has been declining. This morning, some foreign exchange points in Ho Chi Minh City are trading the US dollar at 24,800 dong/USD when buying and 24,860 dong/USD when selling, a decrease of about 200 dong compared to about a week ago. At the beginning of February 2024, the free USD exchange rate maintained at a higher level above 25,000 dong.

Notably, the domestic exchange rate has cooled down even though the USD on the international market remains high. The USD index is still above 103 points.

According to some experts, the domestic USD rate has cooled down as Lunar New Year approaches due to the abundant source of remittances. In just Ho Chi Minh City alone, in 2023, the amount of remittances has reached approximately USD 9.5 billion, an increase of 43.3% compared to the previous year and the highest growth rate in the past 5 years.

The USD rate in banks has been rapidly decreasing in recent days

According to Mr. Ngo Dang Khoa, Director of the Foreign Exchange, Capital Market and Securities Services Department at HSBC Vietnam, the USD has experienced a sharp record decline in the fourth quarter of 2023 after expectations that the Federal Reserve (FED) will soon cut interest rates at the beginning of 2024. However, positive signals from the labor market and the US economy in recent times, along with statements from FED members about continuing to act based on actual data, have caused market members to gradually cut their expectations of an early interest rate cut.

HSBC Vietnam experts predict that the exchange rate outlook for the entire year of 2024, especially the second half of the year, will improve, especially when the USD reaches its peak and the domestic economy and credit gradually recover. The forecast for the USD/VND exchange rate at the end of the year is around 24,400 dong/USD.

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