On August 22, the State Bank of Vietnam devalued the VND mid-point rate against the USD by 1 VND, to 24,245 VND/USD.
Meanwhile, commercial banks made mixed adjustments. For instance, Vietcombank currently buys USD at 24,750 VND and sells at 25,120 VND, up 20 VND from the previous session’s close.
In contrast, Eximbank reduced its rates by 10 VND, offering a cash purchase rate of 24,740 VND/USD and a selling rate of 25,170 VND/USD…
In the black market, the USD fell by 60 VND from the previous day to 25,240 VND/USD (buying) and 25,320 VND/USD (selling). The contrasting movements between the two markets widened the selling rate gap for each USD from 300 to 430 VND.
Compared to the record high of 26,030 VND/USD in late June, the greenback in the free market has now depreciated by 2.7%.
Internationally, the US dollar index (DXY), which measures the strength of the US dollar, fell to 101.17 points – its lowest level since the beginning of the year. Since the beginning of August, the DXY has lost more than 3% of its value.
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The USD weakened as the minutes of the US Federal Reserve’s (Fed) July policy meeting revealed that most officials supported a base rate cut in September.
Following this, the market focus shifts to Fed Chair Jerome Powell’s speech at the Jackson Hole economic conference on Friday for further insights into the Fed’s policy path. The information in this speech is crucial as it will help investors determine the short-term trajectory of the USD.
However, most economists recently predicted that the US Federal Reserve would likely cut interest rates by only 0.25% in the remaining three policy meetings of 2024.
The Financial Market Research Center of ACB bank suggested that the strong recovery in exports is considered a positive support for the USD/VND exchange rate, in addition to the weakening US dollar.
With the possibility of the USD-Index falling to the 98-99 point range by the end of Q3, it is predicted that the downward trend of the USD/VND exchange rate in Vietnam may continue.
According to analysts from UOB bank in Vietnam, the USD/VND exchange rate is expected to reach 25,200 VND/USD in Q3 and 25,000 VND/USD in Q4, before gradually declining to 24,600 VND/USD in the first two quarters of 2025.
THÙY LINH
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