The State Bank of Vietnam Unexpectedly Increases the USD Selling Price to a New Record High
Checking USD at Vietcombank. (Photo: Tran Viet/VNA)
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Last weekend, the State Bank of Vietnam (SBV) unexpectedly increased the USD selling price to a new record high of over 26,000 VND.
Despite the notable depreciation of the USD since the end of 2024, exchange rate pressure remains due to various factors, including the recent surge in gold prices.
On March 25th, the central exchange rate set by the SBV continued to increase to 24,847 VND/USD, a rise of 16 VND compared to March 24th.
With a +/- 5% fluctuation band, the ceiling and floor rates for March 25th were 26,089 VND/USD and 23,605 VND/USD, respectively.
The reference exchange rate at the SBV’s Foreign Exchange Trading Center was 23,640-26,022 VND/USD (buying-selling).
At commercial banks, Vietcombank and BIDV listed the buying and selling rates at 25,460-25,820 VND/USD, an increase of 40 VND in both rates compared to the previous day. In the free market, the USD rate also hovered around 26,000 VND.
Notably, since the beginning of the year, the central exchange rate has been adjusted upwards significantly, by 512 VND or 2.1%.
In the previous week (March 21st), the market witnessed the SBV increasing the USD selling price above 26,000 VND for the first time.
On the international market, the DXY index, which measures the strength of the US dollar, remains above the 104-point threshold.
As of March 24th, the DXY index had decreased by 3.7% compared to the end of 2024.
The USD weakened against most currencies due to concerns about the uncertain growth outlook of the US economy, the impact of tariffs on inflation, and the overall economic situation.
Maybank Investment Bank, in its recent market update, stated that the SBV increased the USD selling price to a new record high of 26,003 VND last weekend, marking a 2.1% increase since the beginning of February 2025, amid rising tensions in the domestic foreign exchange market.
In reality, the domestic gold market witnessed record-breaking increases last week, with gold prices surpassing 100 million VND per tael while global gold prices remained at a historical peak of over 3,000 USD per ounce.
Compared to the end of 2024, domestic gold prices have increased by approximately 19%, indirectly putting pressure on the exchange rate. Although the gold market is under tight supervision and management by the SBV, the surge in gold prices will affect domestic gold demand, and gold traders will use foreign currency to purchase gold. In addition, the presence of gold smuggling groups also impacts the exchange rate.
According to Associate Professor and Doctor Nguyen Huu Huan, a finance expert, despite the USD’s current weakness compared to the previous year, exchange rate pressure persists. He attributed this to the recent significant increase in gold prices, which has exerted pressure on the foreign exchange market.
Moreover, Mr. Huan believes that the general exchange rate pressure in 2025 is mainly due to the low-interest-rate policy aimed at supporting economic growth.
In the Fed’s meeting last week, the Federal Reserve maintained interest rates. This has kept the interest rate differential between the VND and USD on the international market high, creating pressure on the exchange rate.
“Concerns about Donald Trump’s tariff policies may lead to a US economic recession and inflation, causing the USD to weaken. However, the USD/VND exchange rate is not only related to the USD but also to the relationship with the money flow in the market. When the interest rate differential widens, it will put pressure on foreign capital, as evidenced by foreign investors’ continuous net selling in the past. These factors have exerted pressure on the exchange rate,” Associate Professor and Doctor Nguyen Huu Huan analyzed.
According to a recent statistic by VPBank Securities, foreign investors have maintained net selling in the Vietnamese stock market.
Notably, last week, the market witnessed the strongest net withdrawal by foreign investors since the beginning of the year, exceeding 4,200 billion VND. Cumulatively, from the beginning of the year, foreign investors have net sold approximately 22,000 billion VND.
On the other hand, the exchange rate also faces pressure from the increasing foreign currency demand from domestic enterprises for raw material imports.
According to data from the General Statistics Office, the trade balance of goods in February 2025 recorded a deficit of 1.55 billion USD, the first deficit since May 2024.
Additionally, the State Treasury’s purchases of USD from commercial banks have also tightened foreign currency supply and put further pressure on the exchange rate.
Although exchange rate pressure remains and requires close monitoring, analysts expect the exchange rate increase in 2025 to be insignificant, fluctuating below 3%.
According to Dr. Can Van Luc, a finance expert, the US started the interest rate reduction process at the end of 2024 as the economy weakened. Additionally, the decrease in US inflation has provided room for the Fed to cut interest rates, although the process may be slow.
The USD has also depreciated significantly since the beginning of this year, indicating that the exchange rate is unlikely to be a significant concern this year.
Maybank Investment Bank’s experts also stated that, in reality, the USD selling price in the market has only increased by 0.5-0.8% since the beginning of the quarter, much lower than the fluctuations observed in the second through fourth quarters of 2022-2024, when market pressure was higher.
In the near future, the securities company expects the foreign exchange market to remain stable without disrupting the SBV’s loose monetary policies.
Meanwhile, the interbank interest rate has remained stable at around 4% as the SBV recently reduced the Treasury bill interest rate in the open market operation (OMO), indicating that the SBV wants commercial banks to proactively reduce interest rates.
“We believe that the foreign exchange market is still under the control of the SBV. Therefore, the SBV will continue to pursue loose monetary policies to support domestic economic growth and development,” Maybank Investment Bank stated./.
Hua Chung
– 20:35 25/03/2025
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