The tariff shock and excess liquidity are exerting pressure on the exchange rate between the Vietnam dong and the U.S. dollar in the short term. However, a stable macroeconomic backdrop gives Vietnam enough tools to regulate and mitigate systemic risks. Rising pressure Since early 2025, the U.S. dollar has steadily appreciated against the dong even though the State Bank of Vietnam (SBV) has actively sold the foreign currency for intervention. The reference rate published by the SBV on April 28, 2025, rose to VND24,960 per dollar, up by more than 2.5% against the beginning of the year. Given the trading band of 5% on either side of the reference rate, the selling price of the dollar at commercial banks picked up to above VND26,000. Notably, the exchange rate pressure was increasing sharply in April, with the rate rising over 1% this month alone. But it is important to note that the current exchange rate pressure mainly stems from two short-term factors: trade disruptions in April following the announcement of the new U.S. tariff policy, and internal pressure from excess liquidity on the interbank market. Tariff pressure wipes out half of Q1 2025 trade surplus The tariff shock forced many importers—especially […]