Vietnam’s Dong Under Pressure as Geopolitical Tensions Drive Up USD Demand
Hanoi – The Vietnamese Dong (VND) is facing increasing pressure against the US dollar (USD) as global geopolitical instability, particularly escalating tensions in the Middle East, fuels demand for the greenback. Vietnamese banks have adjusted their USD exchange rates upwards, nearing a key psychological threshold, while the unofficial market reflects even greater volatility. This situation is prompting concerns about potential inflationary pressures and is being closely monitored by the State Bank of Vietnam (SBV).
The rising USD/VND exchange rate is not occurring in isolation. It’s part of a broader trend observed across emerging markets as investors seek safe-haven assets amid heightened uncertainty. The conflict in the Middle East has already triggered a surge in oil prices, adding to inflationary concerns worldwide. This confluence of factors is placing significant strain on the Vietnamese economy, which relies heavily on imports and is striving to maintain both robust economic growth and macroeconomic stability.
Today, March 9, 2026, the State Bank of Vietnam (SBV) set the central exchange rate at 25,059 VND/USD, a 2 VND increase compared to the end of last week. This adjustment allows commercial banks to trade within a band of +/- 5%, setting a maximum selling rate of 26,311 VND/USD and a minimum buying rate of 23,806 VND/USD. Banks are reportedly offering USD at the upper limit of this range, while demand continues to push prices higher, particularly in the unofficial market.
Commercial Bank Rates Reflect Increased Demand
Leading commercial banks in Vietnam have responded to the shifting market dynamics by adjusting their USD exchange rates. Vietcombank, one of the country’s largest lenders, is currently quoting a selling price of 26,311 VND/USD and a cash buying price of 26,041 VND/USD, representing a 2 VND increase in the selling price and a substantial 40 VND increase in the buying price. Vietcombank’s adjustments reflect the heightened demand for USD.
Similarly, VietinBank has set its USD selling price at the maximum allowable rate of 26,311 VND/USD, while maintaining its cash and transfer buying rates at 26,091 VND/USD. VietinBank’s actions demonstrate a consistent response to market pressures. BIDV has as well increased its USD selling price to the upper limit, with cash and transfer buying rates at 26,061 VND/USD. Techcombank, ACB and Sacombank have all followed suit, raising their USD selling prices to the maximum permitted level, with buying rates ranging between 26,020 and 26,090 VND/USD.
The parallel, or unofficial, market is exhibiting even more pronounced movement. Reports indicate that the selling price of USD in the unofficial market has approached 27,000 VND/USD, with buying prices reaching 26,849 VND/USD. This divergence between official and unofficial rates suggests a growing imbalance between supply and demand and highlights the increasing pressure on the Dong.
Geopolitical Tensions and Global Economic Factors
The SBV attributes the recent increase in USD demand to the escalating tensions in the Middle East. According to Pham Thanh Ha, Deputy Governor of the SBV, the conflicts have caused a significant spike in oil prices, rising between 8% and 13% in recent days. Pham Thanh Ha stated during a government press conference on March 4th that this surge in oil prices is contributing to inflationary pressures globally.
major central banks worldwide, including the US Federal Reserve, are adopting a more cautious approach to interest rate cuts. Some institutions are even considering raising interest rates in response to rising inflation. These fluctuations in global monetary policy are adding to the pressure on Vietnam’s exchange rate. The SBV acknowledges that the Vietnamese economy, being highly open, is directly affected by these international developments.
The SBV has pledged to utilize a comprehensive set of tools to stabilize the exchange rate and ensure the smooth functioning of the market. “The State Bank of Vietnam will use a comprehensive toolkit to stabilize the exchange rate and ensure the market operates smoothly,” affirmed Deputy Governor Pham Thanh Ha. This commitment signals the government’s determination to mitigate the impact of external shocks on the Vietnamese economy.
Historical Context and Recent Trends
According to data from the State Bank of Vietnam, the USD/VND exchange rate has been relatively stable in the preceding weeks. On March 7, 2026, the buying rate was 23,855.00 VND/USD, the selling rate was 26,259.00 VND/USD, and the interbank rate was 25,057.00 VND/USD. Fexant provides a historical record of these rates. Prior to the recent escalation of tensions in the Middle East, the USD selling price at major banks was around 26,230 VND/USD. Over the past week, this figure has risen by 81 VND/USD, reaching 26,311 VND/USD.
The recent appreciation of the US dollar against the Vietnamese Dong is part of a broader trend affecting many emerging market currencies. The strength of the US dollar is often linked to its status as a safe-haven asset during times of global uncertainty. As geopolitical risks increase, investors tend to flock to the dollar, driving up its value against other currencies.
Implications for the Vietnamese Economy
A weaker Dong can have several implications for the Vietnamese economy. Firstly, it can lead to higher import costs, contributing to inflationary pressures. Vietnam relies heavily on imports for raw materials and intermediate goods, so a depreciation of the Dong makes these imports more expensive. Secondly, it can increase the burden of foreign debt denominated in USD. Finally, it can impact the competitiveness of Vietnamese exports, although a weaker Dong can also make exports more attractive to foreign buyers.
The SBV’s ability to manage the exchange rate will be crucial in the coming months. The central bank has a range of tools at its disposal, including foreign exchange interventions, adjustments to interest rates, and macroprudential measures. Still, the effectiveness of these tools will depend on the evolution of the global economic situation and the severity of the geopolitical tensions in the Middle East.
Key Takeaways
- The Vietnamese Dong is under pressure against the US dollar due to escalating geopolitical tensions in the Middle East.
- Vietnamese banks have increased their USD exchange rates, nearing the 27,000 VND/USD mark in the unofficial market.
- The State Bank of Vietnam (SBV) is closely monitoring the situation and has pledged to use its toolkit to stabilize the exchange rate.
- Rising oil prices and a cautious approach to interest rate cuts by major central banks are contributing to the pressure on the Dong.
- A weaker Dong could lead to higher import costs and increased foreign debt burdens for Vietnam.
The SBV is scheduled to hold its next monetary policy meeting on April 15, 2026, where it will assess the latest economic developments and consider further measures to stabilize the exchange rate. Market participants will be closely watching this meeting for signals about the central bank’s future policy direction. We encourage readers to share their perspectives and engage in constructive discussion in the comments section below.