Exchange rate risks need attention in near future

	Fed’s foreseen rate cuts affect foreign exchange rate
	Flexible and proactive when exchange rates still fluctuate in 2025
	SBV makes significant net withdrawal to stabilise exchange rate

VND is still being tightly controlled, helping to limit short-term exchange rate fluctuations. Photo: ST

The Government has proposed that the National Assembly approve the supplement on socio-economic development in 2025 with a growth target of 8% or more.

According to experts, this target also depends on the level of removing economic bottlenecks, unblocking investment capital flows, promoting exports, etc.

With a large amount of money flowing into the economy, it is necessary to consider solutions to cope with risks from inflation, exchange rates, etc.

In particular, foreign exchange rates are considered to face many challenges when the trade war may continue to boost the USD in the coming time.

Currently, the USD Index - a measure of the strength of the USD compared to six key currencies (EUR, JPY, GBP, CAD, SEK, CHF) is at 107-108 points, continuously at a high level before the tariff policies of President Donald Trump.

Therefore, domestically, the VND/USD exchange rate is forecast to continue to be at a high level in the context of global risks showing no signs of cooling down.

Experts from MB Securities Company (MBS) commented that the challenge for the USD/VND exchange rate still remains as the trade war is forecast to be a supporting factor for the USD in the coming time.

Risks related to Mr. Trump's tariff policy will continue to strengthen the position of the USD. Therefore, exchange rate risks will still need attention in the coming time.

MBS expects the exchange rate to fluctuate in the range of 25,500 - 25,800 VND/USD in the first quarter of 2025 upon the new Government’s fiscal easing plans, combined with tighter immigration policies along with high interest rates in the US compared to other countries and relatively high protectionism in the US.

Rong Viet Securities Company (VDSC) has a more cautious view when stating that the USD/VND exchange rate will fluctuate within a range of +/-5% depending on many factors.

These include foreign exchange reserves, domestic foreign currency supply and demand, and the US's tariff policy towards Vietnam.

VDSC presents a baseline scenario in which the exchange rate at the end of 2025 could be at 26,200 VND/USD if macroeconomic factors develop as expected.

However, there are still positive factors supporting the VND such as: Positive trade surplus (about US$3.03 billion in January 2025), abundant FDI disbursement (US$1.51 billion, up 2% over the same period last year) and strong recovery of tourism (up 36.9% over the same period in January 2025).

According to VDSC, the stability of the macro environment is likely to be maintained and further improved, which will be the basis for stabilizing the exchange rate in 2025.

Speaking at the working session of the Government Standing Committee with commercial banks on February 11, 2025, Governor of the State Bank of Vietnam (SBV) Nguyen Thi Hong also commented that this is a very challenging task.

Therefore, regarding the exchange rate, the SBV will closely monitor and flexibly manage according to market developments.

Enterprises need to apply measures to prevent exchange rate risks. Photo: H.Diu

For import-export enterprises, the increase in USD exchange rate will benefit export enterprises.

However, if the cost of importing raw materials to produce goods increases, international logistics costs also increase, the benefits from exchange rates will be limited.

So according to experts, in the context of exchange rates being an unpredictable variable, enterprises need to apply risk prevention measures, such as expanding export markets, avoiding dependence on traditional markets.

Along with that, it is necessary to diversify payment currencies to spread risks, even increase costs to buy exchange rate insurance.