A teller counts the greenback at a bank in Hà Nội. Compared to earlier this month, the dollar price has currently decreased by VNĐ280, equivalent to a decrease of 1.1 per cent. VNA/VNS Photo

HÀ NỘI — The USD/VNĐ exchange rate has decreased quite rapidly in recent weeks thanks to better domestic economic growth prospects in the fourth quarter of 2023 and decreasing pressure from the international market following the US Federal Reserve (Fed)'s unchanged rate decision.

Compared to early this month, the dollar price has currently decreased by VNĐ280, equivalent to a decrease of 1.1 per cent.

The reference exchange rate between the Vietnamese đồng and the US dollar announced by the State Bank of Việt Nam (SBV) at the last trading session of last week decreased by VNĐ50 compared to the beginning of the week.

The SBV last Friday listed the reference rate at VNĐ24,014 per dollar. With a margin of /- 5 per cent being applied, the exchange rate cap that commercial banks can quote was VNĐ25,214 per dollar, and the floor exchange rate was VNĐ22,812 per dollar.

BIDV listed the rate at VNĐ24,205 and VNĐ24,505 per dollar for buying and selling. All week, the greenback at the bank dropped by VNĐ165 per dollar for buying and VNĐ130 per dollar for selling.

The greenback price listed by Vietcombank was VNĐ24,170 and VNĐ24,540 per dollar for buying and selling. Last week, the price of the dollar at this bank decreased by VNĐ130 for both buying and selling.

According to analysts from ACB Securities Company, in the short term, there are no significant risks for the foreign exchange rate from the domestic economy. The rate and dollar liquidity are reaching a new equilibrium point because domestic economic growth in Q4 2023 is expected to be better than that in Q3 2023, and pressure from the international market is easing in the wake of the US Federal Reserve (Fed)'s decision to maintain its policy interest rate for two consecutive months. Besides, the dollar index (DXY) is also cooling down and international trade is showing signs of bottoming out.

In addition, Asian government bond yields also decreased sharply, thereby reducing pressure on foreign exchange rates. Yields on Vietnamese Government 10-year bonds decreased from 3.2 per cent per year near the end of October 2023 to less than 2.8 per cent per year currently.

In recent days, the price of the greenback has continuously gone down. It is in complete contrast to last year's developments when the dollar increased at a high level. The current dollar price is nearly VNĐ400 lower than the same period last year, equivalent to about 1.6 per cent.

Along with that, in recent days, the SBV has temporarily ceased withdrawing money on the open market operation (OMO). The SBV’s cash withdrawal is aimed at avoiding the amount of cheap money to speculate in the foreign currency market.

However, experts forecast pressure on the exchange rate until the end of this year will still remain.

Dr. Nguyễn Hữu Huân, a lecturer at HCM City Economics University, said Việt Nam's foreign exchange rate is not only affected by the Fed's interest rate decision but also depends on many other factors.

According to Huân, the SBV is also trying to reduce the interest rate gap between the đồng and the dollar through issuing bills to withdraw money out of the banking system. The measure has also been effective, but the interest rate gap still remains.

Besides, the need for the greenback to import a lot of goods at the end of the year to serve production and business during holidays, including Lunar New Year, will also put pressure on the exchange rate, he said.