Topic: depreciate

Based on the appreciation of the USD in the world market and new credit growth limits from the State Bank of Vietnam (SBV) for commercial banks, the Vietcombank Securities Company (VCBS) has forecast that the VND will depreciate by 3-4 per cent this year. It also forecasts that deposit rates will continue to increase this year, by 1-1.5 per cent.

The USD/VND exchange rate depreciated 0.5 per cent in August and there is pressure on the local currency. With stable macro-economic indicators and flexible management adopted by the State Bank of Vietnam, however, securities companies believe the VND will not depreciate by more than 3 per cent this year.

The VND lost 0.38 per cent against the USD in July and 2.21 per cent in the first seven months of the year. The Bao Viet Securities Company (BVSC), however, believes the currency will not depreciate by more than 3 per cent for the year as a whole given the flexible management of the State Bank of Vietnam.