Vietnam sets dong daily reference rate at 25.298 per dollar

Vietnam sets dong daily reference rate at 25.298 per dollar

The State Bank of Vietnam (SBV) has set the daily reference rate for the Vietnamese dong (VND) at 25,298 per U.S. dollar (USD), marking a significant shift in the country's currency policy. This move comes amidst a backdrop of global dollar strength and heightened geopolitical tensions, which have been driving investors towards safe-haven assets.

The official mid-point rate, as set by the SBV, is a crucial benchmark for currency transactions in Vietnam. The new rate is part of a broader trend where the dong has been weakening against the USD for several consecutive sessions. This trend reflects the increasing demand for USD, driven by investors seeking stability and security in uncertain times.

The SBV has established a trading band of +/- 5% around the mid-point rate, allowing commercial banks to quote rates between 24,000 and 26,526 VND per USD. However, in the unofficial market, the USD is trading at a premium, with rates reaching up to 26,649 VND per USD, indicating a significant gap between official and unofficial exchange rates.

The latest exchange rates and gold prices were released on August 22, 2025. According to the data, the interbank offered rates were at 26,407/26,412 VND per USD, while the unofficial market rate was 26,563/26,648 VND per USD. The gold prices, quoted by state-owned Saigon Jewelry Co., were 124.4/125.4 million dong per tael.

Analysts attribute the weakening of the dong to the strong performance of the USD globally. The U.S. Federal Reserve's aggressive interest rate hikes have made the dollar more attractive to investors, exerting pressure on the dong and complicating Vietnam's monetary policy. Dinh Duc Quang, country head of global markets at UOB Vietnam, noted that the likelihood of U.S. interest rates staying elevated through the rest of 2025 remains high, which will continue to pressure the dong.

The high USD rates have dampened expectations of local rate cuts, which the government had hoped would support credit growth and help achieve its 2025 gross domestic product (GDP) growth target of over eight percent. Elevated U.S. yields are attracting dollar holdings globally, which may limit Vietnam's ability to stabilize the USD/VND exchange rate or boost foreign reserves.

The SBV's governor, Nguyen Thi Hong, acknowledged that exchange rate management in 2025 would face significant pressure, citing both external economic shifts and domestic sentiment. In the short term, UOB Vietnam expects the central bank to maintain current policy rates for the Vietnamese dong while monitoring macroeconomic indicators and the impact of new tariff policies that took effect on August 1.

References:
[1] https://www.tradingview.com/news/reuters.com,2025:newsml_L4N3UE08F:0-vietnam-dong-gold-rates-august-22/
[2] https://news.tuoitre.vn/vietnam-dong-hits-record-low-as-us-dollar-strengthens-103250821123328576.htm