HSBC Vietnam has forecast the reference exchange rate between the US dollar and the dong at VND23,550 at the end of the year, above the levels currently quoted by local banks.
The dollar prices are currently posted at between VND23,250 and VND23,260 for selling and at VND23,110-VND23,130 for buying at local banks.
Pham Hong Hai, one of HSBC Vietnam’s board members, said that the current reference exchange rate has not changed much compared with the start of the year.
The bank predicted the end of the year rate would be VND 23,550 since the exchange rate is expected to rise by 1 percent-2 percent this year, he said at an annual business event run by HSBC Vietnam, themed “Step into the future Grow through challenges,” held on September 24.
The bank in a report released at the event also forecast that the exchange rate between the Chinese yuan and the greenback may be roughly 7.2 yuan per US dollar. Hai pointed out that the current USD/CNY exchange rate still remains within an acceptable range, and panic will break out if the figure inches up.
The People’s Bank of China has devalued the yuan but so far has slowed down the effects and started to take action to lower compulsory reserves and reduce interest rates to support the economy.
The Chinese central bank will not devalue the yuan sharply for fear of strong foreign capital outflows, as occurred previously.
Besides this, HSBC also predicted Vietnam’s economic growth rate for this year would stay at 6.7 percent, with the consumer price index at 2.7 percent.
According to Joseph Incalcaterra, chief economist for Asean markets at HSBC, the nation’s inflation was kept low thanks to the government’s intervention. Moreover, foreign investment is the driving force for future growth, he added.
The United States remains a major market for Vietnam, with exports to the country, mostly textiles and footwear products, on an upward trend.
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