A bank teller counts the dollar at a branch in Hà Nội. After cooling down in August and September, the USD/VNĐ exchange rate has increased again since the fourth quarter. Photo cafef.vn

The US dollar may further strengthen against the Vietnamese đồng to hit VNĐ25,400 per dollar at the end of this month, according to experts.

After cooling down in August and September, the USD/VNĐ exchange rate has increased again since the start of Q4. The State Bank of Vietnam (SBV) resumed offering treasury bills worth VNĐ33,950 billion from October 18 to 21 this year after nearly two months of suspension. The dollar, as listed by commercial banks has increased by VNĐ680, equivalent to 2.75 per cent compared to the beginning of the month and 4.2 per cent compared to the beginning of the year.

According to experts, the USD/VNĐ exchange rate is being affected by both global and domestic factors.

CEO of financial service provider AFA Capital, Nguyễn Minh Tuấn, said the dollar index (DXY) in the world market increased by 2.4 per cent to 103.62 from the beginning of October this year. The US economy maintained its growth momentum after the US Federal Reserve (the Fed) lowered interest rates by 0.5 percentage points in September.

In the domestic market, the dollar demand for payment has increased. In October alone, the State Treasury had four dollar purchases worth US$700 million.

After the SBV resumed its issue of treasury bills, ACB's financial markets division forecasts that the USD/VNĐ exchange rate may continue in the second half of this year to return to the high level of more than VNĐ25,400 per dollar set in the second quarter of 2024.

Director of the KB Securities Company’s macroeconomics and market strategy division, Trần Đức Anh, said the exchange rate pressure may increase in the first half of the fourth quarter of 2024, before cooling down. As the Fed is forecast to have two more interest rate cuts in the last two meetings of this year, the DXY may recover but is unlikely to bounce strongly. The peak period of the dollar demand of domestic enterprises passed so the exchange rate risk in the fourth quarter of this year is no longer too great, but pressure may still appear at some points in the first half of the quarter.

Anh forecasts the USD/VNĐ exchange rate at the end of 2024 at VNĐ25,120 per dollar, up 3.5 per cent compared to the beginning of this year. The exchange rate will cool due to interest rate cuts and an abundant dollar source at the end of the year from remittances, FDI and trade surpluses. — VNS