Exchange rate pressure prevails

This week, SBV returned to net liquidity withdrawal at a substantial level as a large volume of repo contracts matured. This move signaled that liquidity in the banking system had become overly abundant, reflected by a broad-based decline in interbank rates, with the overnight rate dropping sharply to 2.23% by the end of the week. On the global front, the greenback gradually regained value as fears over trade tensions eased, supported by positive earnings results from technology companies. Domestically, USDVND continued to surge amid rising concerns over global supply chain realignment, which could prompt MNCs to shift manufacturing operations away from Vietnam toward countries with more favorable tariff conditions. Given that context, the final impact on Vietnam’s outlook will largely depend on the outcome of upcoming negotiations between Vietnam and the U.S.