The U.S. dollar slightly weakened against the Vietnam dong on Tuesday morning as the greenback’s appreciation streak ended due to profit taking.
The State Bank of Vietnam
, the country’s central bank, adjusted its mid-point USD/VND
rate down by four dong to 22,120 on November 22. This is the first downward adjustment over the past 14 days.
With a trading band of -3%/+3%, banks can fix selling and buying USD prices at between 21,456 and 22,784 dong.
Bank for Investment and Development of Vietnam (BIDV) reduced the selling price of the greenback by 20 dong to 22,600 dong a U.S. dollar. Similarly, ACB and Eximbank cut the USD prices by 40-50 dong.
Meanwhile, Vietcombank and VietinBank slightly increased both selling and buying prices of the greenback.
Gold shops in Hanoi quoted the greenback at 22,620 for bids and 22,660 for asks on Tuesday morning, down 30-40 dong from Monday.
Bankers and experts ascribed the recent strengthening of the U.S. dollar versus the Vietnam dong to the stimulus policy of the U.S. President-elect Donald Trump, the Fed
’s possible interest rate hike in December and rising corporate demand for the greenback in Vietnam to pay import bills toward the year-end.
USD has appreciated 5% against a basket of strong currencies after Trump won the presidential election on November 8, according to Reuters.
The mid-point USD/VND rate increased 1% in the year to last week to 22,112 on November 18, the highest since the new fixing mechanism was adopted in January this year.
According to industry insiders, the U.S. dollar may continue to strengthen against the dong from now till the year-end as Vietnam’s trade deficits are expected to continue in the final two months of 2016 and the greenback may further strengthen in the global market.
However, the rise will be limited as the SBV, with its $40 billion-plus forex reserves, can intervene in the market and commercial banks are in good positions to meet corporate demand.