Currency exchange rates serve as a benchmark for assessing a nation's economic stability
In the rapidly changing economic landscape of 2025, the Vietnamese dong (VND) has been facing a significant depreciation against the US dollar (USD). While the US President Donald Trump's threats to impose a 50% tariff on copper have contributed to the rising exchange rate, it is not the sole factor driving the trend.
Several factors have been identified as contributing to the VND's depreciation. One of the key drivers is the interest rate differential between the VND and the USD. Vietnam's interest rate policies, aimed at stimulating economic growth through low interest rates, have made the VND less attractive to investors compared to the USD[2][4]. This, in turn, has led to a depreciation of the VND.
Monetary easing in Vietnam, as evidenced by the continued low interest rate policy, has also played a role in the VND's depreciation. Despite the USD-Index falling by about 10% since the beginning of the year, the VND has still depreciated by 2.7-2.8% against the USD[2][4].
The VND has also faced pressure from other currencies, such as the Japanese Yen and the British Pound, indicating broader economic influences beyond just US policies[2]. The overall economic conditions, including the impact of global markets and trade dynamics, also play a role in the exchange rate[1][3].
However, specific US tariff policies are not highlighted as a direct cause in the available data[1][3]. The average USD/VND exchange rate for 2025 has been around 25,742 VND per USD[1]. The highest rate was 26,209 VND per USD on June 23, 2025[1]. Recent rates have been around 26,160 VND per USD[5].
Looking ahead, Dr. Nguyen Tri Hieu predicts that the exchange rate could rise by at least 5% this year. Nguyen The Minh, head of Research and Development for Retail Clients at Yuanta Securities Vietnam, predicts that the exchange rate will remain under short-term pressure. The State Bank of Vietnam (SBV) has raised the reference buying and selling rates to VND23,926 and VND26,336 per USD, respectively[6].
The rising exchange rate is expected to fuel inflation, according to Hieu. The economy of Vietnam, heavily reliant on exports and imports, is closely watching the exchange rate trends. If the US Federal Reserve were to implement one or two rate cuts in September or October, the exchange rate pressure in Vietnam may begin to ease, according to Minh[3].
UOB forecasts the USD/VND projections to be 26,400 in Q3, 26,200 in Q4, 26,000 and 25,800 in Q1 and Q2 2026 respectively[3]. Despite a few sessions of mild correction, the exchange rate has continued to rise steadily since early July, reflecting the ongoing influence of the factors discussed above.
Sources: [1] https://www.vietnaminsider.vn/economy/vietnams-forex-reserves-reach-80-billion-usd-in-june-362792.html [2] https://www.vietnamplus.vn/en/economy/vietnam-depreciation-of-vnd-against-usd-not-due-to-us-tariff-policies-38698.html [3] https://www.bloomberg.com/news/articles/2025-07-13/vietnam-s-dong-may-rise-as-much-as-5-this-year-amid-tariff-threats [4] https://www.reuters.com/article/us-vietnam-economy-interestrates-idUSKBN2BK0Y0 [5] https://www.vietnamnet.vn/en/economy/vnd-depreciation-against-usd-continues-despite-few-sessions-of-mild-correction-476818.html [6] https://www.vietnamnet.vn/en/economy/state-bank-of-vietnam-raises-central-exchange-rate-476784.html
- The interest rate differential between the VND and USD, along with Vietnam's ongoing monetary easing, are significant contributors to the VND's depreciation in the finance sector, making the USD more attractive to investors compared to the VND.
- Despite the US President Donald Trump's threats to impose tariffs, the data does not highlight specific US tariff policies as a direct cause of the VND's depreciation, with global economic conditions, including the impact of global markets and trade dynamics, playing a more influential role in the exchange rate.
