Vietnam's State Bank Hikes Reference Rate as Dong Slides
The State Bank of Vietnam increased its official exchange rate by 0.05% to VND25,636 after the dong slid against the US dollar earlier this week, with Vietcombank selling at VND26,190.
State Bank Responds to Dong Weakness
The State Bank of Vietnam (SBV) raised its official reference rate by 0.05% to VND25,636 on Friday, 1 October. This adjustment followed a notable depreciation of the Vietnamese dong against the US dollar. Vietcombank, a prominent commercial institution, was observed selling US dollars at VND26,190, representing a 0.04% increase from the previous day's rate.
Concurrently, the dong also experienced a decline on the unofficial market, where it fell 0.54% to approximately VND25,960 per US dollar.
Global Dollar Strength Drives Trend
The strengthening of the US dollar against the dong mirrored a broader global trend. The greenback was on course for its third consecutive weekly gain against a basket of six major currencies, reaching a 17-month high. The dollar index registered 102.08, positioned for a 1% weekly increase, a streak last observed in May 2025.
This global appreciation was largely attributed to a significant sell-off in bond markets, which propelled borrowing costs worldwide to multi-decade peaks amid inflationary concerns, partly fuelled by higher oil prices.
Impact on Other Major Currencies
Other significant currencies also faced downward pressure from the surging dollar. The euro traded at $1.1237, nearing its lowest point since May 2025, as worries over France's fiscal health weighed on sentiment. The Japanese yen maintained stability at 158 per US dollar.
Both the British pound, at $1.3187, and the Australian dollar, which softened 0.18% to $0.6918, hovered around their respective three-month lows. The dollar's recent robust performance largely came at the euro's expense, influenced by escalating political risks in Europe and energy supply disruptions.
The SBV's reference rate adjustment seeks to stabilise the dong amidst ongoing global currency fluctuations. For Vietnamese businesses, a weaker dong translates into higher costs for imported goods and raw materials, potentially contributing to domestic inflation. Conversely, exporters may find their products more competitive in international markets.
Companies holding substantial foreign currency debt will face increased repayment burdens. Investors should closely monitor further SBV interventions and global central bank policies for sustained currency trends, especially given persistent inflationary pressures from commodity prices.
This article is journalism, not investment advice; consult a licensed professional before making financial decisions. Market data is indicative, may be delayed, and should be verified with your broker or exchange before use.
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