Free USD price heats up again, banks also sell at old peak

During the last session of the week, the State Bank announced the central exchange rate of 23,979 VND. With a margin of 5% compared to the central exchange rate, commercial banks are allowed to buy and sell USD within the range of 22,780 - 25,177 VND.

Banks also raised the USD price compared to the previous session. For example, at Vietcombank, this bank increased 20 VND in both buying and selling prices, to 24,520 - 24,890 VND.

With the above selling price, each USD at this bank has exceeded the peak of 24,888 VND/USD set in October 2022.

BIDV is also listing each USD for two-way buying and selling at 24,570 - 24,880 VND respectively. The exchange rate at Eximbank is also anchored at 24,490 - 24,880 VND.

In the free market, after a few days of cooling down, the free USD price at some foreign currency purchasing points continued to increase by 80 VND in both directions today, March 17, to 25,560 - 25,640 VND.

Although still lower than the peak of 25,700 VND on March 11, the return of heat in the free market after only a few cooling sessions has also raised concerns.

Previously, the issuance of treasury bills on March 11 was expected to be an important move to cool down the exchange rate.

On March 15, the State Bank continued to issue treasury bills on the open market channel, with a total volume of nearly VND 15,000 billion, 28-day term, interest rate of 1.4%/year.

Accumulated net withdrawal volume after 5 sessions reached 75,000 billion VND.

Mr. Tran Thang Long - Director of BIDV Securities Research and Analysis Center (BSC), said that issuing short-term credit notes aims to regulate liquidity in the market and limit foreign currency speculation.

In the long term, it will contribute to stabilizing exchange rates, interest rates, liquidity... to serve the goals of monetary policy.

He recalled that the State Bank of Vietnam had withdrawn VND194,649 billion from the issuance of treasury bills last year from September 21 to November 8, 2023. During this period, the exchange rate also decreased by 0.29% and continued to maintain a downward trend until the end of November 2023.

Meanwhile, overnight interbank interest rates increased sharply by more than 2% during the period from September 21 to October 25, 2023, in response to the SBV's money withdrawal move, but then quickly decreased again.

However, looking at the exchange rate in the new context this year, another financial expert wondered whether the treasury bills and instruments in the interbank market will be able to withstand it or not is still difficult to predict.

Because the economy will grow slowly in 2023, the demand for imported production materials and consumer goods will decrease, increasing the trade surplus, which means increasing the supply of USD.

However, by 2024, economic and consumption activities are forecast to be more vibrant, leading to increased import demand and a possible reduction in trade surplus.