Exchange rate fluctuations threaten year-end imports

DNHN - The management of the exchange rate and foreign currency market was under pressure due to the complicated and unpredictable movements of the international market. Import and export enterprises need to actively respond to exchange rate fluctuations to reduce risks in the last months of the year.

Since the beginning of this year, central banks of other countries have also accelerated the process of tightening monetary policy, raising interest rates to control the pressure of record-high inflation globally and the financial and monetary markets. strong fluctuations. These developments affect the currency market and the VND exchange rate.

Although the management of the exchange rate and foreign currency market is under a lot of pressure due to the complicated and unpredictable developments of the international market, with foreign exchange reserves accumulated over the years, the State Bank affirms that there is enough potential to readiness to intervene in the market when necessary to stabilize the market and exchange rate, contributing to controlling inflation and stabilizing the macro-economy, and supporting the implementation of the Program on economic and social recovery and development. However, importers and exporters always need to actively respond to exchange rate fluctuations to reduce risks in the last months of the year.

According to the State Bank's leaders, although the international market fluctuated strongly, the domestic foreign currency market in the first half of this year still operated stably and the market liquidity was smooth. The legitimate foreign currency needs of the economy are fully and promptly met, especially the demand for foreign currency to import essential commodities for production and business. The State Bank of Vietnam has managed the exchange rate in the direction of creating room for the exchange rate to move flexibly, absorbing external shocks, and intervening in the foreign currency market to limit excessive fluctuations in the exchange rate to contribute to stabilizing the foreign currency market.

It can be said that the import and export challenges in the last 6 months of the year are how to maintain the competitiveness of Vietnamese goods compared to regional goods because the export structure is relatively similar. Economist Nguyen Tri Hieu said that the USD/VND exchange rate has increased since the beginning of the year. Especially, the strong increase in the exchange rate in June was because the FED raised interest rates and pushed up the value of the pound.

“The appreciation of the dong is beneficial to exports and exports are one of the most important pillars of the Vietnamese economy. However, an increase in the exchange rate will increase import prices and also increase import and inflation from exporting countries to Vietnam”, expert Nguyen Tri Hieu analyzed.

In particular, experts warn that in the short term, the Vietnamese dong tends to depreciate against the USD but is stronger compared to other currencies such as the Japanese Yen or the euro common currency – Euro, etc. Therefore, businesses that borrow heavily in USD will be affected in the short term due to exchange rate differences.

On the contrary, businesses that have a lot of debt in Euro or Yen, in the coming time, can increase their financial profit due to the revaluation of exchange rate differences. However, enterprises with large export markets in the European Union or Japan will be at a disadvantage, because they will receive currencies that are depreciating sharply.

P.V