An employee counts American notes at a bank in Hanoi. Photo by VnExpress / Giang Huy
The dollar has fallen against the dong in recent months, but could rebound next year with a slowdown in FDI inflows and an expected current account deficit.
The greenback fell 450 VND, or 1.94%, from last November to 22,750 VND earlier this month, the lowest in years, according to a note from lender HSBC, which says it is expected to fall. even lower to 22,525 VND by the end. this year, against the trend of recent years.
The State Bank of Vietnam (SBV) said in July that it will commit to regulate the exchange rate flexibly and address concerns from the US Treasury Department, said Ngo Dang Khoa, head of markets and securities services of HSBC Vietnam.
Under the deal, Vietnam pledged not to devalue its currency for trade advantage and to make its monetary and exchange rate policies more transparent.
HSBC predicts the dollar could rebound to 23,000 VND next year as Vietnam’s current account surplus could turn into a deficit due to falling incomes in certain sectors like tourism due to the pandemic of Covid-19.
A current account deficit occurs when a country spends more on imports than it receives on exports.
Vietnam’s current account surplus in the first quarter was $ 0.4 billion, down from the quarterly average of $ 3 billion for the period 2019-2020.
Another problem is the slowdown in foreign direct investment inflows.
Average monthly FDI inflows fell from $ 1.8 billion in April-December last year to $ 1.6 billion in April-July this year, HSBC said.
A stronger dollar and weaker Chinese yuan would also help the dollar rise further against the dong, according to the lender.
