Vietnam’s central exchange rate hits record high as dollar strengthens

The central bank’s rate reached VND25,306, up 0.05% from Monday. This exceeded the previous peak in August last year at VND25,298.

Vietcombank sold the greenback 0.02% higher at VND26,525. On the black market the dollar was steady at VND26,420.

The State Bank of Vietnam updates the central exchange rate daily based on developments in the interbank foreign exchange market, a basket of currencies from major trading partners, macroeconomic conditions, and monetary policy objectives. The rate serves as the benchmark for commercial banks to set their trading prices within a 5% trading band.

Globally the U.S. dollar held at a one-month high on Tuesday as traders weighed a slim but lingering chance ‌of a rate hike at the Federal Reserve's upcoming meeting, even as falling oil prices eased some concerns over inflation, Reuters reported.

The dollar index, which measures the greenback against a basket of currencies including the yen and the euro, edged up 0.03% to 101.55, with the euro down 0.01% at $1.1366. Against the Japanese yen, the dollar gained 0.05% to 163.82, while sterling eased 0.02% to $1.3284.

"The lack of meaningful buying at the front end of the Treasury curve has helped keep the U.S. dollar well supported," said Chris Weston, head of research at Pepperstone.

At a press briefing earlier this month, State Bank of Vietnam Deputy Governor Pham Thanh Ha said the exchange rate and foreign exchange market have recently come under pressure due to complex and unpredictable developments in international markets, as well as domestic challenges and difficulties.

He said the central bank's approach is to manage the exchange rate flexibly to help absorb external shocks while combining multiple monetary policy tools to stabilize the foreign exchange market, maintain macroeconomic stability, and keep inflation under control.