The USD/VND exchange rate has likely reached its peak and is expected to “cool down” by the end of the year, according to Mr. Dinh Duc Quang, Country Head of Global Markets at United Overseas Bank Limited (UOB) Vietnam, speaking at the “Global and Vietnam Economic Highlights for H2 2025” media roundtable held in HCMC on September 17.
According to the World Bank’s latest update, by mid-2025, the Thai baht, South Korean won, and Japanese yen had appreciated by 5.6 percent, 6 percent, and 6 percent, respectively, against the US dollar, while the Vietnamese dong (VND) weakened by about 3.4 percent.
Domestic exchange rates climbed in recent months, at times exceeding VND26,500 per US dollar. The State Bank of Vietnam (SBV) drew down US$1 billion from its reserves in March 2025, reducing total foreign exchange reserves to $78.1 billion — equivalent to 2.4 months of imports.
Most recently, in the final week of August 2025, the SBV sold around $1.5 billion through 180-day cancellable forward contracts to credit institutions with negative foreign currency positions, at a rate of VND26,550 per US dollar, in an effort to stabilize the market.
Mr. Dinh Duc Quang noted that, against regional trends, the VND had depreciated to a record low of VND26,436 per US dollar in August 2025 — a 3.4-percent decline since the start of the year and the fourth consecutive year of depreciation.
“Although Vietnam secured a trade agreement with the US, lowering tariffs from 46 percent (announced in April) to 20 percent, uncertainty remains over the 40 percent tariff on transshipped goods. This could prompt firms to reassess supply chain strategies and weaken Vietnam’s appeal to foreign investors,” Mr. Dinh Duc Quang said.
Nevertheless, he projected that the USD/VND exchange rate had already peaked and would ease as the US Federal Reserve (Fed) is expected to cut rates three times between now and the end of 2025.
“With the near-certain 25 basis point rate cut on September 17 (US time), followed by two additional cuts in 2025, we forecast the USD/VND rate to decline to VND26,300 in Q4 2025, VND26,200 in Q1 2026, VND26,100 in Q2 2026, and VND26,000 in Q3 2026,” he said.
Addressing concerns over Vietnam’s reserves covering only 2.4 months of imports, Mr. Dinh Duc Quang argued that the current level is not alarming. “Although not high, it poses little risk since Vietnam’s imports are largely raw materials for processing and re-export, rather than consumer goods. Export revenues can offset import needs, while reserves still cover 7–8 months of consumer imports,” he explained.
“With projected import-export turnover of around $800 billion this year, coupled with robust FDI inflows, Vietnam’s reserves remain sufficient to underpin foreign investor confidence,” Mr. Dinh Duc Quang added.
UOB Singapore raises Vietnam’s 2025 GDP growth forecast to 7.5 percent
UOB’s Global Economics and Market Research division (Singapore) released its latest Vietnam outlook on September 17, revising the 2025 GDP growth forecast upward to 7.5 percent from 6.9 percent.
Vietnam’s GDP expanded 7.96 percent year-on-year in Q2 2025, beating Bloomberg’s forecast of 6.85 percent, UOB’s own 6.1 percent estimate, and Q1’s 7.05 percent growth. For the first half of 2025, growth averaged 7.52 percent — the strongest H1 performance since 2011.
Growth momentum has been driven by exports and strong FDI inflows. Exports in the first seven months of 2025 surged nearly 16 percent, with July alone hitting a record $42.3 billion, up 17 percent year-on-year. For the full year, exports are expected to rise about 10 percent, lower than the 14 percent growth in 2024.
Another positive factor was the US tariff adjustment, which reduced rates on Vietnamese goods to 20 percent effective August 1, easing earlier concerns and stabilizing trade expectations.
“Despite risks from exchange rates and tariffs, Vietnam’s economy has shown remarkable resilience, supported by exports, FDI, and public investment. With impressive first-half growth of 7.5 percent, UOB is confident the full-year rate will reach 7.5 percent, reaffirming Vietnam’s position as a growth bright spot amid global volatility,” said Mr. Suan Teck Kin, Head of Global Economics and Market Research at UOB Singapore.
