In Viet Nam, although the domestic exchange rate has experienced short-term fluctuations, the foreign exchange market remains broadly under control, supported by a stable supply of foreign currency, strengthened reserves, and the State Bank of Viet Nam (SBV)’s flexible management.

External pressures

The conflict in the Middle East is no longer a distant geopolitical issue but is directly affecting the domestic economy.

In the first week of March 2026, global energy markets were shaken as both WTI and Brent crude prices simultaneously exceeded 100-110 USD per barrel, the highest level in more than two years. Disruptions in the Strait of Hormuz, a vital route for global oil shipments, have triggered defensive sentiment, keeping the US Dollar Index (DXY) elevated as investors seek safe-haven assets.

In the domestic market, pressure has begun to show on the electronic boards of commercial banks. On March 9, the SBV set the daily central exchange rate at 25,059 VND per US dollar.

At major banks such as Vietcombank, the selling price of the dollar at times touched the upper limit of the permitted trading band, hovering around 26,311 VND per US dollar. On the informal market, the greenback also edged up, reflecting market expectations amid international uncertainty.

Analysts at credit rating agency VIS Rating note that Middle East tensions may affect the Vietnamese economy primarily through three channels: rising energy prices, imported inflation, and exchange rate pressure. Higher fuel costs are expected to ripple through transportation, industrial production, and power generation, thereby fuelling cost-push inflation and squeezing profit margins in energy-intensive sectors.

Viet Nam remains significantly dependent on imported energy. According to VIS Rating, the country imports around 20 billion USD worth of crude oil, refined petroleum products, and liquefied gas each year, with approximately 80% of crude oil and 15% of liquefied gas sourced from the Middle East.

This dependence makes domestic production and transport costs more sensitive to global oil price fluctuations. Should energy prices continue to rise, imported inflationary pressures may intensify, affecting monetary policy and the exchange rate.

Meanwhile, analysts at MB Securities (MBS) point out that the recent strengthening of the US dollar has been a key factor exerting pressure on the USD/VND exchange rate. Domestic demand for foreign currency remains high, driven by an expansion cycle in production and rising import demand.

In addition, although Viet Nam maintains a substantial trade surplus, most of it comes from the foreign-invested sector, while domestic enterprises continue to record a notable trade deficit. This indicates that demand for US dollars within the economy remains elevated.

Flexible and proactive exchange rate management

Despite external headwinds, experts believe that Viet Nam’s economic fundamentals continue to support foreign exchange market stability.

According to SBV Deputy Governor Pham Thanh Ha, domestic monetary and foreign exchange markets have remained stable in recent times. Banking system liquidity has been ensured, meeting the economy’s payment needs in full. Lending rates for new loans have shown a downward trend, while credit growth has been positive from the start of the year.

In recent years, the central bank has maintained flexible exchange rate management in line with market conditions, ensuring adequate supply for legitimate foreign currency demand. By the end of February 2026, the average interbank exchange rate stood at around 26,044 VND per US dollar, down nearly 1% compared with the end of 2025, indicating a relatively ample supply of foreign currency.

However, as tensions in the Middle East escalate, the exchange rate has shown a slight upward trend in recent days. Ha affirmed that, given ongoing global uncertainties and Viet Nam’s high degree of economic openness, the SBV will continue to closely monitor market developments and manage monetary policy in a proactive and flexible manner.

The central bank will deploy a coordinated set of monetary policy tools to stabilise the foreign exchange market, manage interest rates in line with macroeconomic developments and inflation control objectives, and channel credit towards production, business activities, and key growth drivers.

In practice, the SBV has operated its policy toolkit in a synchronised manner. Alongside flexible daily adjustments to the central exchange rate to absorb shocks, it has also regulated VND liquidity through open market operations (OMO) and issued treasury bills to maintain a reasonable interest rate differential, thereby curbing speculative activity in the foreign exchange market.

Michael Kokalari, Chief Economist at VinaCapital, noted that while short-term pressures are real, their direct impact on Viet Nam remains manageable.

In a rapid assessment of the impact of tensions involving the US, Israe, and Iran, analysts at VNDirect Securities also observed that geopolitical shocks often drive oil prices sharply higher in the short term, but such increases typically ease as markets rebalance according to real supply and demand conditions.

Overall, geopolitical tensions in the Middle East are adding a new layer of pressure to global financial markets, including Viet Nam’s foreign exchange market. Experts suggest that exchange rate movements in the coming period will largely depend on the timing and pace of interest rate cuts by the US Federal Reserve, as well as the scale of conflicts in the Middle East.

If tensions persist and push oil prices above 110 USD per barrel for an extended period, cost-push inflation pressures will intensify. In that scenario, the SBV will face the challenge of balancing low interest rates to support growth against the need to raise rates to defend the currency.

At present, the exchange rate is not only a foreign exchange market issue but also has direct implications for inflation, trade, and investor confidence. As such, exchange rate stability remains closely tied to broader macroeconomic stability.

With solid macroeconomic fundamentals, a positive foreign currency supply, and flexible policy management by the central bank, Viet Nam’s foreign exchange market is expected to remain relatively stable in the near term.

According to MBS analysts, pressure on the exchange rate is likely to ease gradually as the weakening trend of the US dollar becomes more evident. The firm forecasts that the US Dollar Index could fall to around 95 points by mid-2026, while major currencies such as the Japanese yen, pound sterling, and euro are expected to appreciate.

As interest rate differentials between the US and other economies narrow, currencies in emerging markets, including Viet Nam, will gain further room for stability.