Economists and business insiders say to manage currency fluctuations and protect their profit margins, some businesses have been adopting risk-hedging strategies.

Economists say the USD/VND rate stayed elevated in early 2025, influenced by shifts in the US trade policies. A major factor is the 25% tariff on steel and aluminium imports, which has strengthened the USD by attracting capital inflows and pressuring emerging market currencies like the VND.

As Vietnamese exporters and importers adjust to rising trade costs, foreign exchange volatility has intensified.

As of February 7, commercial banks quoted rates at VND25,550-25,574, reflecting a 137 dong increase in the central exchange rate to VND24,462/USD over four consecutive sessions.

Tran Thi Khanh Hien, head of Research at MB Securities (MBS), warned that trade-related risks would continue to strengthen the USD.

“Trump’s tariff policies reinforce the USD’s dominance, making it crucial to stay alert to exchange rate risks,” she said.

Vietcombank Securities (VCBS) forecast a 3% depreciation of the VND in 2025, citing imbalances in forex supply and demand alongside global uncertainties. Meanwhile, Dragon Capital (VDSC) expected the VND to fluctuate within a +/-5% range, with a potential year-end rate of VND26,200/USD, depending on economic trends and policy responses.

Despite challenges, Vietnam’s economic fundamentals provide some stability. The country recorded a trade surplus of US$3.03 billion in January 2025, while foreign direct investment (FDI) disbursement reached US$1.51 billion, up 2% year on year, strengthening forex reserves and increasing foreign currency liquidity. A 36.9% year-on-year surge in tourism revenue has further boosted foreign exchange inflows, helping to stabilise the VND.

A stronger greenback makes Vietnamese exports more competitive internationally but raises costs for imported materials and logistics. Business insiders say higher exchange rates increase revenue in VND but, at the same time, drive up expenses for imported packaging and shipping.

To manage risks, businesses have been tweaking their financial strategies. FPT Corporation has expanded exports to Japan while borrowing in yen, hedging against USD fluctuations and benefiting from the yen’s depreciation.

EVN Genco 3 has restructured US$81.5 million in foreign loans for the Mong Duong 1 Power Plant, reducing financial costs through domestic refinancing. Many import-export firms preferred forward contracts to lock in exchange rates and avoid sudden fluctuations.

Dinh Quang Hoan, Chairman of HIPC Group, highlighted the importance of stability, stating that hedging would help businesses control costs and maintain consumer prices, shielding them from sudden currency shocks.

Given the current volatility, businesses have been urging the government to take measures to stabilise exchange rates. Key recommendations include increasing forex reserves, strengthening trade agreements to secure reliable export markets, and fine-tuning monetary policies to balance growth with inflation control. They claim a predictable exchange rate environment will be crucial for maintaining investor confidence and protecting the economy from external shocks.

Fed’s foreseen rate cuts affect foreign exchange rate

The latest US Federal Reserve (Fed)’s announcement to make fewer interest rate cut next year immediately impacted the USD/VND exchange rate.