Analysts forecast that the Vietnamese đồng (VND) may depreciate 3 per cent against the US dollar in the first half of 2024 as the greenback is expected to maintain its upward momentum in the near future.

According to data from Viet Dragon Securities Company (VDSC), the đồng in the first quarter of 2024 depreciated about 2.1 per cent against the dollar on the official market when the dollar index (DXY) was anchored at a high level.

On the interbank market, the average USD/VNĐ exchange rate is gradually approaching its peak of VNĐ24,867 per dollar, which was reached in November 2023.

“With the expectation that the dollar can still maintain its upward momentum in the near future, we think the depreciation margin of the đồng can widen to 3 per cent in the first half of 2024," VDSC forecasts.

According to VDSC, this devaluation rate of the đồng against the dollar is in line with expectations at the beginning of this year, but the view that the đồng may appreciate again at the end of the year needs to be considered more cautiously because the Federal Reserve (Fed)'s interest rate reduction roadmap and expectations related the upcoming US presidential election can continue to support the trend of a strong dollar.

Earlier, some financial institutions also forecast the devaluation of the đồng in 2024. Specifically, UOB predicted that the USD/VNĐ exchange rate will reach VNĐ24,400 per dollar in the second quarter of 2024, VNĐ24,200 in the third quarter of 2024, VNĐ24,000 in the fourth quarter of 2024 and VNĐ23,800 in the first quarter of 2025.

Ngô Đăng Khoa, country head of Markets and Securities Services at HSBC Vietnam, forecasts that the USD/VNĐ exchange rate will improve in the second half of 2024, especially when the dollar reaches its peak and the domestic economy and credit gradually recover. Accordingly, the USD/VNĐ exchange rate will end this year around the price range of VNĐ24,400 per dollar.

Meanwhile, KB Securities Company (KBSV) expects the USD/VNĐ exchange rate to be more stable in 2024 and to increase by 1.5 per cent to reach VNĐ24,600 per dollar in the year thanks to an overall balance surplus of US$7-10 billion in 2024 in the wake of positive FDI inflows and remittances, and a reduction in the balance finance deficit.

Besides, KBSV expected the State Bank of Vietnam may not intervene in the exchange rate and would continue to maintain a loose monetary policy and accept a moderate increase in exchange rate because domestic inflation is still under control, while the economy needs continued support for recovery. — VNS