The exchange rate of the US dollar (USD) against the Vietnamese dong (VND) has surged, with the State Bank of Vietnam announcing a 10 VND increase, bringing the central exchange rate to 25,293 VND. This level is only 5 VND away from the record high established last year.

This morning, the State Bank raised the central exchange rate by another 10 VND, calculated based on the interbank market trends, the currency basket of major trading partners, macroeconomic balances, and policy objectives. Each US dollar is now equivalent to 25,293 VND, nearing the peak of 25,298 VND set at the end of August last year.

Analysts view the continuous adjustment of the central exchange rate as a proactive defense against the strong recovery of the USD. The DXY index, which measures the strength of the US dollar, has risen by 3% since the beginning of the year, while the new central exchange rate has only increased by about 0.7%. This indicates that the central exchange rate is being adjusted in a controlled manner to align with global trends.

With a permissible margin of 5% from the central exchange rate, commercial banks can trade the USD within the range of 24,028 to 26,557 VND. Following a period of stability, the USD rates at banks have approached the upper limit of this margin. Vietcombank is buying USD at 26,140 VND and selling at 26,520 VND, reflecting a 10 VND increase in line with the central rate. Other banks, including Vietinbank, BIDV, and Eximbank, have also adjusted rates upwards by 5-15 VND compared to the end of last week.

Meanwhile, informal currency exchange points are buying USD at around 26,400 VND and selling at approximately 26,450 VND, showing little change from the previous week. In a mid-month monetary report, VNDirect Securities analysts noted that exchange rate pressures could be somewhat balanced by a positive supply of foreign currency from foreign direct investment (FDI) and the maintenance of high dong interest rates.

The analysts also believe that the State Bank is likely to continue managing the exchange rate flexibly through open market operations, foreign exchange interventions, and currency swap tools as necessary. They maintain the outlook that the USD/VND exchange rate will fluctuate within a range of about 1-2% this year. SSI Research experts also expect that "pressure on the exchange rate will be manageable" in the second half of the year if FDI flows remain stable and the foreign exchange market does not face significant external shocks.