USDVND under pressure amid prolonged Middle East tensions

In 12W26, the SBV continued its net liquidity withdrawal for a second consecutive week at a strong pace as funding demand in the banking system normalized. On the interbank market, short term rates edged higher while longer tenors remained broadly unchanged, consistent with the SBV withdrawal stance. On the FX front, USDVND edged higher for the fourth consecutive week as escalating Middle East conflicts fueled global inflation pressures, impacting the Fed’s interest rate trajectory and maintaining a cautious stance on rate cuts. Domestically, these global uncertainties combined with sustained foreign capital outflows continued to weigh on the exchange rate.