Cover Standard Chartered Bank has revised its USD-VND exchange rate forecast, highlighting economic shifts and potential challenges for Vietnamese businesses. Photo: Standard Chartered
Standard Chartered Bank has revised its USD-VND exchange rate forecast, highlighting economic shifts and potential challenges for Vietnamese businesses. Photo: Standard Chartered
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Standard Chartered Bank has adjusted its forecast for the USD-VND exchange rate, signalling evolving economic trends and a range of potential challenges for Vietnamese enterprises.
The exchange rate between the US dollar and the Vietnamese dong has seen notable fluctuations. According to Standard Chartered’s latest projections, the USD is expected to maintain its upward trajectory, with the exchange rate forecasted to reach 26,000 by mid-2025 and 25,700 by year-end. These shifts could significantly impact Vietnamese businesses, affecting everything from raw material imports and export competitiveness to foreign currency loans.
In this landscape of unpredictable exchange rate movements, what strategies can Vietnamese enterprises adopt to navigate these challenges with confidence?
Standard Chartered Forecast
In its latest macroeconomic report on Vietnam, Standard Chartered Bank has revised its projections for the USD-VND exchange rate, reflecting broader global and regional economic trends.
Over the past three years, the Vietnamese dong has generally moved in line with other Asian emerging market currencies, influenced by the strength of the US dollar. While market volatility remains low, external factors—including shifting trade dynamics and broader global economic conditions—could continue to shape exchange rate movements. As a result, Standard Chartered has raised its forecast, now projecting a mid-year rate of 26,000 (up from 25,450) and an end-of-2025 rate of 25,700 (previously 25,000).
Above Tim Leelahaphan, Senior Economist for Thailand and Vietnam, Standard Chartered Bank. Photo: Standard Chartered
Tim Leelahaphan, Senior Economist for Thailand and Vietnam, Standard Chartered Bank. Photo: Standard Chartered
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"Vietnam’s short-term economic outlook remains cautious, with businesses closely monitoring developments in US trade policy—particularly given Vietnam’s sizeable trade surplus with the US. At the same time, Vietnam has signalled its readiness to import more American agricultural products, among other goods," noted Tim Leelahaphan, Senior Economist for Thailand and Vietnam at Standard Chartered Bank.
Impact on Vietnamese businesses
As the USD strengthens, Vietnamese businesses—particularly importers—face mounting challenges. Rising input costs, coupled with soaring fuel and transportation expenses, could lead to weakened consumer purchasing power for imported goods.
Above Photo: Super Middle East
Photo: Super Middle East
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However, this wave of currency fluctuations does not solely affect importers. Financial experts warn that while businesses reliant on USD-denominated imports and loans are bearing the brunt of increased costs, exporters may not necessarily benefit. Since much of the machinery, equipment, and raw materials required for export production must be imported, higher exchange rates drive up costs, ultimately reducing the competitiveness of Vietnamese goods in international markets.
How are Vietnamese businesses navigating economic uncertainty?
As the USD-VND exchange rate remains volatile, Vietnamese enterprises must take a proactive approach to risk management, fortifying their financial strategies to protect profits and ensure stability. A comprehensive risk management framework is essential, enabling businesses to anticipate various scenarios and implement preventive measures that safeguard operations.
Hedging tools such as forward contracts and currency options allow businesses to “lock in” exchange rates at predetermined levels, mitigating losses caused by fluctuations. For those with foreign currency loans, reducing outstanding debt to a minimum amid heightened volatility and employing hedging instruments—such as swaps and forward contracts—can help stabilise borrowing costs.
Diversification is another key strategy. Expanding supply sources and export markets beyond traditional partners can reduce reliance on the US dollar. Engaging with domestic suppliers, exploring emerging markets, and adopting alternative payment currencies such as the euro or Japanese yen offer additional layers of security. Keeping a close watch on market trends and US trade policies also serves as an early-warning system, allowing businesses to make timely and informed decisions.
Above Photo: stockcake
Photo: stockcake
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Exploring derivative financial instruments—such as options and foreign currency swaps—can further strengthen risk management strategies. Partnering with banks that offer favourable trade finance policies is also worth considering. Additionally, setting aside a reserve fund for exchange rate fluctuations and prioritising early repayment of foreign currency loans, particularly large USD-denominated loans, can help businesses better navigate currency risks in international trade.
In the long term, enhancing the competitiveness of export goods and refining product differentiation remain fundamental goals. For importers, maximising domestic resources, identifying alternative suppliers—particularly within Vietnam—and gradually reducing reliance on imports can lower costs and bolster resilience. These strategic moves not only help businesses weather economic turbulence but also position them for sustained growth in the global marketplace.
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