A teller counts the dollar at a bank in Hà Nội. The devaluation of the dollar against the đồng will help reduce pressure on domestic interest rates. VNA/VNS Photo

HÀ NỘI — The State Bank of Việt Nam (SBV)’s central exchange rate of the Vietnamese đồng against the US dollar has cooled down and dropped below the VNĐ24,000 mark in the context of a decline of the dollar index in the international market.

The devaluation of the dollar against the đồng will help reduce pressure on domestic interest rates.

The reference exchange rate closed last week at VNĐ23,972 per dollar, down VNĐ42 compared to the previous week. Over the past two weeks, the rate decreased by about VNĐ112.

Compared to the October peak at VNĐ24,110 per dollar, the rate currently cools down by about 0.5 per cent.

The SBV on Monday continued to adjust down the rate by VNĐ18 to VNĐ23,954 per dollar.

Similarly, the dollar price listed at commercial banks has also continuously gone down in recent days. Currently, Vietcombank is trading the greenback at VNĐ24,070 for buying and VNĐ24,415 for selling, down VNĐ55 per dollar.

The price at BIDV is VNĐ24,100 for buying and VNĐ24,400 for selling.

Compared to a month ago, the dollar price at commercial banks has decreased by about VNĐ300, equivalent to a decrease of about 1.2 per cent.

However, if calculated from the peak in recent months when the dollar price at commercial banks exceeded VNĐ25,000 per dollar, the banks’ exchange rate has cooled down by up to 2.4 per cent.

On the international market, the dollar index (DXY) has also dropped sharply from 106.95 points to 103.68 points, equivalent to a decrease of about 3.1 per cent compared to a month earlier.

According to Đinh Quang Hinh, head of VNDirect Securities Company’s Macro and Market Strategy Division, domestic exchange rate pressure has cooled significantly in the context that the market believes the US Federal Reserve (Fed) will stop increasing its policy interest rates.

Cooling exchange rates have allowed the SBV’s monetary policy to ease.

In fact, in the last six auctions, the SBV completely ceased bill issue despite the maturity of a large amount of bills. It meant the SBV net injected a large amount of cash back into the market. Since the beginning of November 2023, the SBV has net injected more than VNĐ108 trillion and reduced the amount of bills in circulation to nearly VNĐ100 trillion.

The SBV’s move has helped make the banking system's liquidity more abundant and interbank interest rates have reduced sharply. Therefore, concerns about the risk of a reversal in domestic monetary policy have been removed, according to Hinh.