The bank’s USD price is being traded almost at par with the Euro price, which is unprecedented in nearly 20 years. Today (July 13), the State Bank of Vietnam listed the USD/VND exchange rate at 23,198 VND/USD, an increase of 15 dong/USD compared to the previous session, while the Euro price was also traded closely.
At commercial banks, the price of USD was traded at 22,550 – 23,400 VND/USD (buy in – sell out), while the Euro was announced at 22,571 – 23,967 (buy in – sell out).
The exchange rate between the Euro and the US dollar is close to par.(Artwork: CNBC)
In the latest trading session on the international market, the euro touched approximately 1 USD, down about 12% since the beginning of the year amid growing fears of a recession in the “old continent” as inflation soars. and energy supply instability due to the Russia-Ukraine war.
According to AFP, the weakening of the euro will make imports to Europe more expensive, driving up inflation, but benefiting the region’s exporters. However, the impact of the euro weakening depends on each enterprise, depending on the degree of dependence on foreign trade and energy.
Theoretically, a falling euro will help boost exports of goods and services in Europe, thereby stimulating economic growth. However, this benefit could be outweighed by soaring commodity prices caused by the Ukraine conflict, especially in export-reliant economies like Germany.
A series of aggressive interest rate hikes by central banks, including the US Federal Reserve, coupled with slowing economic growth will put pressure on the currency, analysts said. Euro while driving investors towards USD as a safe haven.
Currently, the Fed is ahead of Europe in terms of tightening, having raised interest rates to 75 basis points while the signal to raise interest rates this month is increasingly clear.
Each Euro is currently exchanged for $ 1,002, the lowest level in nearly two decades.(Illustration image: KT)
While the USD in the domestic and international markets has increased sharply recently, the common currency of the European Union (EU) has fluctuated in the opposite direction. This will have a significant impact on US and EU trade with other countries.
According to statistics, in the first 6 months of 2022, bilateral trade turnover between Vietnam and the US reached 64.15 billion USD. The US is currently Vietnam’s second largest trading partner and largest export market.
As for the EU, the import-export turnover between Vietnam and the EU in the first six months of 2021 reached 27.67 billion USD, up 18.4% over the same period in 2020, of which exports increased by 18.3% (reaching the same period last year). 19.4 billion USD) and imports from the EU into Vietnam increased by more than 19.1% (reaching 8.2 billion USD) over the same period in 2020.
The US and EU are currently Vietnam’s leading trading partners. According to a banking and finance expert, Dr. Can Van Luc, FED is about to raise interest rates and USD will continue to become a haven and investment currency. When the price of USD increases, enterprises exporting in USD will benefit because of the increase in value. But importers suffer losses because they have to use more local currency to buy USD.
Dr. Can Van Luc said that Vietnam has more advantages than other countries as the State Bank operates the exchange rate flexibly, so the VND only depreciates by 2% while in the world there are currencies that depreciate by 3-13%. . Therefore, importers are also less disadvantaged. In addition, Vietnam is still in trade surplus, so it is not negatively affected.
In the current market, the Euro is not used for payment much, so it is not a concern when this currency depreciates. What businesses need to pay attention to is risk management and should buy foreign currency ahead of time, said Dr. Can Van Luc noted.
Dr. Can Van Luc also forecasts that the exchange rate in the second half of 2022 will still be under control with an increase of about 2.5% thanks to the following factors: The increase of the USD in the coming time is not expected to be so strong as in the past 6 months, The domestic foreign currency supply and demand will continue to be actively supported thanks to the forecasted trade balance of 4-8 billion USD in 2022 and abundant foreign exchange reserves, over 100 billion USD as well as the The State Bank of Vietnam continues to implement an active and flexible exchange rate policy to support market stability.
Source: CafeF
Source: Vietnam Insider