With a permissible trading band of plus or minus 5 percent, commercial banks are authorized to trade the dollar within a ceiling of 26,860 VND and a floor of 24,398 VND. At the major state-controlled banks, including Vietcombank, Vietinbank, and BIDV, the selling price for the US dollar remained clustered in the range of 26,060 to 26,074 VND. Vietcombank, for instance, bought dollars in cash at 25,660 VND and sold them at 26,070 VND, maintaining a spread of 410 VND for cash transactions. These figures represent a stabilization from the sharp fluctuations observed at the beginning of the month, when opening rates at major banks had dropped significantly from the October 8 session.
The persistence of the high reference rate highlights the external forces weighing on the dong. The US Dollar Index (DXY) has maintained levels above 102 points, marking a fourth consecutive week of gains. This upward momentum is attributed to the Federal Reserve’s cautious monetary policy outlook and elevated US government bond yields. Although US Treasury yields are heading for their biggest weekly drop in approximately three months, the dollar remains supported by broader uncertainties in international financial markets. Analysts note that the dollar’s upward trajectory could face obstacles if upcoming economic data indicates cooling inflation or a weakening outlook for US growth, but for now, the greenback remains resilient.
In the immediate term, the dollar exhibited slight softness in Asian trading sessions on Friday, edging lower against major currencies. During this period, Vietcombank’s selling rate briefly dipped to 26,020 VND, a 0.3 percent decrease from the previous day, while unofficial exchange points saw the rate rise to approximately 26,180 VND. Globally, the euro remained under pressure, straddling a 17-month low amidst concerns over French debt, while the Japanese yen headed for a fourth straight weekly decline, steadying around 158 yen to the dollar. The Australian and New Zealand dollars posted minor gains, rising 0.2 percent to $0.6975 and $0.5614 respectively, as the broader dollar index retreated slightly from recent peaks.
Domestic market dynamics suggest that while the reference rate hits record highs, the actual trading prices at banks are influenced more directly by foreign currency supply and demand, individual banks’ foreign currency positions, and global market movements. Consequently, a record reference rate does not necessarily signal a new period of severe stress in the foreign exchange market. The SBV’s management framework utilizes the reference rate as a tool to guide expectations, but the resilience of the dong in commercial banks indicates that supply and demand remain relatively balanced.
Market participants are now closely watching upcoming US Consumer Price Index (CPI) data and signals from the Federal Reserve regarding its interest rate path. Any indication of a shift in US monetary policy could alter the trajectory of the dollar, thereby easing or intensifying pressure on the Vietnamese dong. Until such data is released, the exchange rate is expected to remain in a narrow trading range, with domestic banks maintaining stable buying and selling prices despite the elevated reference benchmark.
