On August 8, the State Bank of Vietnam set the daily reference exchange rate at 25,228 VND per USD, a decrease of 21 VND from the previous day.
Commercial banks are trading the USD at around 26,030 VND/USD for buying and 26,390 VND/USD for selling.
However, since the beginning of the year, the exchange rate has increased by over 3% and has been maintaining high levels in recent days.
The exchange rate has increased by over 3% since the beginning of the year
Mr. Dinh Duc Quang, Director of Monetary Business Division at UOB Vietnam, analyzed that in the latest meeting, the US Federal Reserve (Fed) decided to keep the USD policy rate unchanged, remaining at a high level of 4.5%. The Fed Chair did not provide a definite forecast for the interest rate direction in the September 2025 meeting.
With this new development, the USD has strengthened significantly against other currencies, and the DXY index has returned to its highest level in three months. There is a possibility that USD interest rates may continue to be anchored at a high level, averaging above 4% even though UOB Vietnam believes that the Fed will cut rates two to three times in the latter part of the year.
This situation continues to put pressure on the expectation that VND interest rates will be cut to support production and business and promote high growth towards the goal of achieving over 8% GDP growth this year.
Considering the Exchange Rate and Interest Rate Equation
At the regular Government meeting in July, which took place on August 7, the Governor of the State Bank of Vietnam, Nguyen Thi Hong, acknowledged that the exchange rate is under considerable pressure due to the dual impact of economic factors and market sentiment.
So far, the USD/VND exchange rate has increased by 2.9% compared to the end of last year. In this context, the Governor stated that if the pressure continues to intensify, the State Bank will consider refraining from further interest rate cuts to avoid affecting exchange rate stability, which could lead to macro instability.
“We will closely monitor the developments and set appropriate priorities for each phase, aiming for the common goal of macroeconomic stability and sustainable economic growth,” affirmed Governor Nguyen Thi Hong.
UOB Vietnam forecasts that the USD/VND exchange rate will continue to trade at high levels around 26,400 – 26,500 VND in the third quarter and will slightly decrease to around 26,000 VND by the end of the year. At 26,000 VND, the exchange rate would represent a depreciation of about 2-3% for the entire year.
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