What is the VND USD forecast for 2024?

VND to USD in 2024: A Gentle Breeze of Appreciation Predicted

The Vietnamese Dong (VND) is expected to experience a modest appreciation against the US Dollar (USD) in 2024, with forecasts pointing towards a year-end exchange rate of 25,120 VND per USD. This subtle strengthening comes after a period of relative stability and reflects a confluence of factors impacting Vietnam’s economic landscape.

While the VND has faced pressures in recent times, the outlook for 2024 suggests a more tranquil trajectory. Several key drivers are anticipated to contribute to this gentle appreciation:

• Lower Interest Rates: Anticipated easing of monetary policy in Vietnam could lead to lower interest rates, potentially reducing the attractiveness of VND-denominated assets for foreign investors seeking higher returns. However, this impact is expected to be moderate, contributing to a gradual rather than a sharp appreciation.

• Strong Dollar Inflows: Vietnam’s economy continues to benefit from robust inflows of US dollars. Remittances from overseas Vietnamese workers remain a significant source of foreign currency. Furthermore, Foreign Direct Investment (FDI) continues to flow into the country, attracted by Vietnam’s growing manufacturing sector and favorable investment climate. A healthy trade surplus further bolsters dollar reserves, contributing to the VND’s resilience.

• Cooling Inflationary Pressures: Global inflationary pressures are anticipated to ease in 2024. This, coupled with proactive measures by the State Bank of Vietnam, could help stabilize the VND and prevent significant fluctuations against the USD.

While the forecast of 25,120 VND/USD suggests a slight appreciation, it’s crucial to acknowledge the inherent uncertainties in predicting exchange rates. Geopolitical events, unexpected shifts in global economic conditions, and changes in domestic monetary policy could all influence the VND’s performance against the USD.

Furthermore, the projected appreciation is relatively small, indicating that the exchange rate is expected to remain largely stable throughout the year. This stability can be beneficial for businesses engaged in international trade and investment, providing a degree of predictability for planning and operations.

In conclusion, the VND is poised for a mild appreciation against the USD in 2024, driven by lower interest rates, robust dollar inflows, and a more stable global economic outlook. However, the projected change is modest, highlighting an expectation of overall stability in the VND/USD exchange rate. Businesses and investors should continue to monitor economic developments and consider hedging strategies to mitigate potential risks associated with currency fluctuations.