BVSC's experts believe that the current devaluation pressure of the VND is mainly due to the appreciation of the USD, while Vietnam still maintains a stable macroeconomy, low inflation, positive real interest rates and a trade surplus. The devaluation of VND would not exceed 3% in 2022.

According to a report of Bao Viet Securities (BVSC), in August, the VND continued to decrease by 0.37% against the USD. Compared to the end of 2021, the VND has also decreased by 2.64% against the USD. Meanwhile, in the world market, the USD Index increased by 3.13% from the previous month and 13.73% from the beginning of the year.

All currencies in emerging Asian countries continued to have strong declines against the USD. In which, the Korean Won dropped the most, at 11.15% compared to the beginning of the year; and VND recorded the lowest decrease, 2.64%.

During the Jackson Hole Economic Symposium held in August, the Chairman of the US Federal Reserve (Fed), Mr. Jerome Powell stated the central bank's fierce stance in dealing with inflation and announced that the Fed would keep raising interest rates until inflation is under control.

Therefore, it is likely that the Fed will continue to raise interest rates by 0.75 percentage points in the policy meeting in September and this has continued to make the USD appreciate strongly.

BVSC assesses that the current devaluation pressure of the VND is mainly due to the appreciation of the USD, while Vietnam still maintains a stable macroeconomy, low inflation, positive real interest rates and a trade surplus.

BVSC experts maintain their forecast that with the internal strength and flexible management measures of the SBV, the VND would not depreciate more than 3% in 2022.

According to the State Bank, credit growth as of August 15, 2022 reached 9.62%, the highest increase in August in the past 5 years. However, the credit growth continued to slow down, only increasing by 0.2 percentage points within 3 weeks, because the State Bank has not yet loosened the credit room.

In recent years, the State Bank has actively used open market operations, continuously using OMO tools and bills. In the upcoming period, under pressure from the exchange rate when the Fed continues to raise interest rates strongly, BVSC believes that the deposit interest rate will continue to increase.

Kylie Nguyen