Foreign exchange rates remain in control after U.S. tariffs

Experts believe that due to the 46% reciprocal tax imposed by the United States on Vietnamese exports, the supply of US dollars and the foreign exchange rate in the domestic market may be under pressure, but the State Bank of Vietnam (SBV) can still control it through monetary policy tools.

Fan Luxiong, director of the research department of Saigon Securities Company, predicts that the pressure to adjust the exchange rate may not be too great in the short term, because the Vietnamese dong has been depreciating against the US dollar for a long time, forming a certain buffer.

Nguyen Xuan Phuc said: "The exchange rate is still a factor that needs to be closely watched, but with existing policy tools, the State Bank of Vietnam is still able to control the exchange rate in the short term."

the central bank still has room to operate monetary policy. Specifically, it can lower interest rates and control the money supply to stabilize the exchange rate and inflation, he added.

Meanwhile, Chen Huangshan, director of the market strategy department of VPBank Securities Joint Stock Company (VPBankS), said that in the context of tax policy, if the National Bank intervenes through the sale of foreign exchange reserves, the exchange rate of the US dollar against the Vietnamese dong may rise by 3% to 5% by 2025. National banks should be more flexible in managing exchange rates to stabilize the foreign exchange market.

Regarding credit, SSI's Hưng also believes that even if exports are severely affected in the short term, the State Bank of Vietnam's credit growth target of more than 16% this year is still achievable because the growth momentum will come from the domestic market.

Hong predicted that once the domestic economy grows strongly, banks will seek opportunities to further increase lending. For example, infrastructure loans were previously classified as high-risk industries due to long payback periods, and banks were at risk of term structure imbalances.

However, the government is currently promoting infrastructure investment, so the process related to public investment has been simplified. As a result, banks are also actively promoting infrastructure loans, as developers of infrastructure projects can recover their investment principal more quickly and thus repay bank loans.

Experts believe that to reduce exchange rate risks, the State Bank of Vietnam should manage the exchange rate flexibly, but should not fix or anchor the exchange rate, because the Vietnamese economy is deeply integrated into the market economy, which requires flexibility.

At the same time, for enterprises, the current recommendation is to closely manage cash flow and rationally use tools to prevent exchange rate risks, thereby optimizing operations and investment activities. -- Source: VNS