Market experts believe the main issue has been the increase in foreign currency demand due to Vietnam's growing import demand. According to the General Statistics Office, imports in the first two months of 2024 were valued at just under $55 billion, up 18 per cent on-year. In addition, domestic gold is more expensive than international gold, leading to increased demand. Credit also remains weak, with a decrease of 0.33 per cent as of March 18 compared to the end of 2023.

"By the end of last year, the USD exchange rate had increased by about 2.9 per cent compared to the beginning of the year, and it was about 1.2 per cent off the peak. Although VND has depreciated in line with global trends, it remained quite stable in 2023. Other currencies in the region have also depreciated against the dollar, for example, Malaysia's ringgit depreciated by 4.3 per cent, and the Chinese yuan depreciated by 2.9 per cent," said Tran Thi Khanh Hien, director of research at MB Securities.

Last year, the ringgit, yuan, and Thai baht were all weak, so Vietnam did not need to restrain the exchange rate too much while still maintaining the competitiveness of its currency. However, at present, only the VND is weak, so the level of exchange rate maintenance will be higher than last year.

One of the solutions implemented by the operator is to issue bonds after a 4-month hiatus to stabilise the exchange rate. On March 11, the State Bank of Vietnam (SBV) offered bonds, and by March 26, the pace of money withdrawal had decreased slightly, with only a little over $154 million being withdrawn from the system through bond instruments with a term of 28 days. Therefore, since the resumption of the bond channel, the SBV has attracted nearly $6.5 billion in liquidity and has not yet made any additional injections, and as of April 8, the first new bond lot has matured.

In mid-March, the SBV consulted on the draft circular amending and supplementing Circular 02/2021/TT-NHNN guiding foreign exchange transactions on the forex market of credit institutions permitted to operate in the foreign exchange market.

Determining the forward exchange rate in forward transactions, forward transactions in swaps between credit institutions with each other, and between credit institutions and customers will be based on the SBV's regulations instead of being limited to the forward exchange rate ceiling based on the interest rate differential basis.

According to economic experts, this will help the SBV have more flexibility in pre-emptive management of market fluctuations. However, the pressure on the international market remains high as positive economic indicators from the United States means the SBV may have to implement stronger measures.

According to analysts, at the beginning of the money withdrawal, the interbank interest rate increased from 0.7 per cent to 1.4 per cent in two days before falling back. Although the SBV withdrew nearly $8.33 billion, the interbank interest rate remained unchanged, so this measure may be futile.