Vietnams Central USD/VND Exchange Rate Soars to All-Time High Amid Rising Dollar Strength
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The State Bank of Vietnam has adjusted its central USD/VND exchange rate to an unprecedented high, reflecting a strong U.S. dollar in global markets. The central bank’s rate has escalated to VND25,306, marking a 0.05% increase from the previous day. Notably, this surpasses the previous high established in August last year, which stood at VND25,298.
Vietcombank increased its rate by 0.02%, selling the U.S. dollar at VND26,525. Meanwhile, the black market recorded a steady rate at VND26,420. The State Bank of Vietnam modifies the central exchange rate daily, factoring in the interbank foreign exchange market’s fluctuations, a compilation of currencies from significant trading partners, macroeconomic conditions, and monetary policy objectives. This rate serves as a guide for commercial banks to determine their trading prices within a 5% trading band.
Global Impact on US Dollar
Internationally, the U.S. dollar reached a one-month high on Tuesday. Traders are considering the slim yet persistent possibility of a rate hike at the upcoming Federal Reserve meeting. This speculation comes amidst falling oil prices, which have alleviated some inflation concerns.
“dollar against a selection of currencies, including the yen and the euro, rose by 0.03% to 101.55.”
The dollar index, tracking the U.S. dollar against a selection of currencies, including the yen and the euro, rose by 0.03% to 101.55. The euro experienced a slight decrease of 0.01%, standing at $1.1366. Against the Japanese yen, the dollar saw a 0.05% rise to 163.82, while the sterling dipped by 0.02% to $1.3284.
Chris Weston, head of research at Pepperstone, noted that the absence of substantial buying at the Treasury curve’s front end contributed to the U.S. dollar’s robust performance.
Earlier this month, the State Bank of Vietnam’s Deputy Governor, Pham Thanh Ha, commented during a press briefing about the recent external pressures on the exchange rate and foreign exchange market. These pressures are a result of intricate and unpredictable shifts in international markets, compounded by domestic challenges.
According to Ha, the central bank’s strategy involves managing the exchange rate flexibly to buffer external shocks. This approach is coupled with the use of a variety of monetary policy tools to stabilize the foreign exchange market, maintain macroeconomic stability, and keep inflation in check.
Questions & Answers
Q.What led to the State Bank of Vietnam adjusting the central USD/VND exchange rate?
What led to the State Bank of Vietnam adjusting the central USD/VND exchange rate?
The adjustment followed the U.S. dollar’s strengthening in global markets.
Q.What factors influence the daily modification of the central exchange rate by the State Bank of Vietnam?
What factors influence the daily modification of the central exchange rate by the State Bank of Vietnam?
The bank’s daily adjustments consider the interbank foreign exchange market’s changes, a collection of currencies from major trading partners, macroeconomic conditions, and monetary policy objectives.
Q.What is the State Bank of Vietnam’s strategy in managing external pressures on the exchange rate and foreign exchange market?
What is the State Bank of Vietnam’s strategy in managing external pressures on the exchange rate and foreign exchange market?
The bank employs a flexible approach in managing the exchange rate to absorb external shocks. Additionally, it uses several monetary policy tools to stabilize the foreign exchange market, maintain macroeconomic stability, and control inflation.
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