The US dollar has devalued against the Vietnamese dong in the second quarter of 2020. (Photo: VNA) Hanoi (VNS/VNA) - Firms with US dollar-denominated debts estimate to regain significantly in the second quarter of this year as the US dollar has devalued against the Vietnamese dong in the period after reporting a surge in the first quarter.
In the first quarter of 2020, the USD/VND exchange rate increased by nearly 2 percent to 23,644 VND per US dollar in the context that the global greenback price hit a three-year high with the US Dollar Index on March 20 reaching 102.8, up 6.7 percent compared to the end of 2019.
The domestic foreign exchange rate was also affected adversely when currencies of many major trading partners of Vietnam devalued and the domestic market sentiment was hit by the COVID-19 pandemic.
According to experts, the COVID-19 pandemic caused the global financial market to plummet. The need to withdraw capital from risky assets to pour into secure, safe assets was the main reason for the rise of the dollar.
The appreciation of the dollar against the dong in Q1 2020 significantly affected firms with large dollar-denominated loans, causing them to report losses related to the foreign currency exchange rate.
However, the situation has changed since the second quarter. The USD/VNĐ exchange rate has reversed and is continuing on a downward trend. The dollar is currently traded at around 23,265 VND, down 1.6 percent compared to the beginning of Q2 2020 because the supply of foreign currencies in the domestic market has been good, especially when the country’s trade surplus is still high.
Therefore, firms with large dollar-denominated loans, such as Binh Son Refinery and Petrochemical Joint Stock Company, Vietnam Aviation Corporation JSC and PetroVietnam Power Corporation, expect to benefit from the move in the second quarter.
On June 17, the State Bank of Vietnam set the daily reference exchange rate at 23,240 VND per dollar, down 9 VND from the previous day.
With the current trading band of /-3 percent, the ceiling rate applied to commercial banks during the day is 23,937 VND per dollar and the floor rate 22,542 VND.
During the day, Vietcombank listed the buying rate at 23,090 VND per dollar and the selling rate at 23,300 VND, both down 10 VND from the previous day.
At BIDV, both rates were cut by 5 VND to 23,120 VND for buying, and 23,300 VND for selling.
Techcombank cut 1 VND for both rates, listing the buying rate at 23,104 VND for buying, and 23,304 VND for selling./.
VNA
