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Vietnam: Greenback cools, pressure on VND/USD exchange rate eases
As the dollar price has decreased in the international market, the official exchange rate announced by the State Bank of Vietnam (SBV) and dollar market price have also decreased slightly.
Dollar price down
The official exchange increased in the last week of April, reaching VND23,272 per dollar in the last trading session of the week, the highest ever.
However, on April 28, the official exchange rate decreased by VND10 per dollar to VND23,262 and by another VND5 on April 29 to VND23,257.
The dollar prices quoted by commercial banks fall and rise with the official exchange rate. Banks buy dollars at VND23,340-23,350 per dollar, and sell at VND23,520-23,530.
Analysts said the dollar depreciated in Vietnam after it depreciated in the world market. Investors think that the bailouts launched by the US and the QE packages by FED may put pressure on US inflation.
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| As the dollar price has decreased in the international market, the official exchange rate announced by the State Bank of Vietnam (SBV) and dollar market price have also decreased slightly. |
Moreover, the figures about the US economy made public recently are less satisfactory, especially figures about retail revenue, industrial production and services. Its GDP in Q1 decreased sharply by 4.8 percent compared with the same period last year.
The official exchange rate has increased by VND102 per dollar so far this year, or 0.44 percent. Meanwhile, banks’ buying price has increased by VND310 per dollar, or 1.34 percent, and selling price has increased by VND300, or 1.3 percent.
Though the greenback price has decreased slightly, the pressure on the dong/dollar exchange rate still exists. The dollar in the international market is still traded around the 100 point threshold, the highest level in the last three years.
Analysts said the US FED has slashed interest rates to support the economy, but the interest rate cut was nothing compared with other central banks such as ECB and BOJ. Therefore, the dollar interest rate is still higher than the interest rate of the euro and Japanese yen, which is important support for the dollar.
An analyst commented that the dollar price decline is just temporary. The pandemic will not be contained completely all over the globe until there is a vaccine.
This means that the demand for dollar will still be high as investors consider dollars as a safe asset in the context of global economic uncertainties.
Vietnamese financial institutions also think that the dollar price would stand high, especially because of the forecast that the dollar supply won’t be as plentiful as 2019.
KB Securities, which previously predicted that the dollar price would go flat in 2020, has adjusted its prediction about the dong/dollar exchange rate, saying that the dong would lose 2.5 percent of value this year.
Chi Mai
Source: https://vietnamnet.vn/en/business/greenback-cools-pressure-on-dong-dollar-exchange-rate-eases-639395.html