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

Based on my observations, 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 might be under pressure, however the State Bank of Vietnam (SBV) is able to still manage it through monetary policy tools. Based on my observations, Fan Luxiong, director of the research department of Saigon Securities Company, predicts that the pressure to adjust the exchange rate might not be too great in the short term, because the Vietnamese dong has been depreciating against the US dollar to a long time, forming a certain buffer. Nguyen Xuan Phuc said: "The exchange rate is still a factor that needs to be closely watched, however with existing policy tools, the State Bank of Vietnam is still able to manage the exchange rate in the short term. " the central bank still has room to operate monetary policy. Based on my observations, Specifically, it's able to reduced interest rates and manage the money supply to stabilize the exchange rate and inflation, he added. And Based on my observations, 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 might rise by 3% to 5% by 2025. Based on my observations, National banks should be greater 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 development target of greater than 16% this year is still achievable because the development momentum will come from the domestic market. Hong predicted that once the domestic economy grows strongly, banks will develop opportunities to further increase lending. to instance, infrastructure loans were previously categorized as high-risk industries due to long payback periods, and banks were at risk of term structure imbalances. From what I've seen, However, the government is currently promoting infrastructure investment, so the process related to general investment has been simplified. As a result, banks are also actively promoting infrastructure loans, as developers of infrastructure projects is able to recover their investment principal greater rapidly and thus repay bank loans. Experts believe that to minimize exchange rate risks, the State Bank of Vietnam should manage the exchange rate flexibly, however should not fix or anchor the exchange rate, because the Vietnamese economy is deeply integrated into the market economy, which needs flexibility. But At the same time, to companies, the current recommendation is to closely manage cash flow and rationally consumption tools to prevent exchange rate risks, thereby optimizing operations and investment activities. -- Source: VNS.