Vietnam's Exchange Rate Holds Steady Despite High Trade Deficit

The US dollar price increased by less than 1% in July, with the State Bank of Vietnam raising the central exchange rate by a total of 132 VND/USD to 25,338 VND. This is a relatively low increase compared to recent years, and the central exchange rate recorded a year-to-date increase of 0.86% (an increase of 217 VND). Commercial banks did not raise their selling prices to the maximum allowed level as before, with Vietcombank increasing its buying price by only 24 dong.

The majority of imported goods are machinery, equipment, and components serving investment projects, especially FDI projects. Many of these imports are financed by foreign investors themselves, meaning they do not need to purchase foreign currency from the domestic banking system to make payments, thus not affecting the demand for foreign currency in the market.

Financial expert Nguyen Tri Hieu believes that the exchange rate's stability is due to a combination of factors, including the cyclical nature of import and export activities. He also points out that Vietnam has favorable interest rates compared to other countries, which helps limit exchange rate pressure by reducing the hoarding or speculation of USD.