SBV Cuts Central Rate 5 VND to 25,561, Ending 3-Week Streak

Overview

On August 14, the State Bank of Vietnam (SBV) cut the central reference rate by 5 VND to 25,561 VND/USD, marking the first decline after a three-week upward trend. The adjustment aligns with a softer US dollar globally, while commercial banks, including BIDV (HOSE: BID) and Vietcombank, raised their USD rates. This development is relevant for Vietnamese banks’ forex operations and their stock performance.

Key Facts

• The central rate was set at 25,561 VND/USD on August 14, down 5 VND from the previous session.
• This is the first decrease after a three-week rising streak that began in mid-July.
• The central rate is now about 1.75% higher than at the start of 2025 (25,121–25,130 VND/USD).
• Vietcombank quoted USD at 25,900 (cash buy), 25,930 (transfer buy), and 26,310 (sell) VND/USD, up 60 VND from the previous morning.
• BIDV quoted USD at 25,930–26,310 VND/USD (buy–sell), also up 60 VND on both sides.
• The DXY index stood around 99.73, down 0.21% from the prior session.
• US July CPI and PPI data showed cooling inflation, reducing expectations of a Fed rate hike in September to about 35%.

What Happened

The SBV announced on August 14 that the central reference rate for the Vietnamese dong against the US dollar would be 25,561 VND/USD, a decrease of 5 VND from the previous day. This marks the first decline after a continuous rise lasting three weeks, from mid-July to mid-August. The adjustment reflects a broader easing of global dollar strength, as the DXY index slipped to around 99.73, down 0.21%.

Commercial banks moved in the opposite direction, raising their USD rates. At Vietcombank, the USD was listed at 25,900 VND/USD for cash purchases, 25,930 VND/USD for transfer purchases, and 26,310 VND/USD for sales, all up 60 VND from the previous morning. Similarly, BIDV quoted USD at 25,930–26,310 VND/USD (buy–sell), also up 60 VND on both sides. These adjustments came as US inflation data for July showed cooling price pressures, reducing the likelihood of aggressive Fed rate hikes.

Market Context

BIDV (HOSE: BID) closed at 38,250 VND on August 14, 2026. The banking sector is sensitive to forex movements, as exchange rate stability affects capital flows and asset quality. The SBV’s decision to lower the central rate, coupled with commercial banks raising their rates, suggests a managed approach to balance export competitiveness and import costs. The cooling US inflation and reduced Fed hike expectations have eased pressure on the dong, potentially supporting bank valuations.

Strategic Significance

For long-term investors, the SBV’s move signals a proactive management of exchange rate expectations, which is crucial for macroeconomic stability. The reduction in the central rate, while commercial banks raise their rates, indicates a narrowing of the gap between official and market rates, potentially reducing arbitrage opportunities. For BIDV, stable forex conditions can enhance profitability from trading activities and reduce provisioning needs. The easing of global dollar pressure may also attract foreign capital into Vietnamese equities, benefiting banking stocks.

What to Watch

• Subsequent central rate announcements for further adjustments or stabilization.
• Commercial bank USD rate movements, especially at BIDV and Vietcombank, to gauge market sentiment.
• US inflation data and Fed policy signals, as they influence global dollar strength.
• BIDV’s quarterly earnings reports for forex-related income and provisioning.
• Foreign ownership changes in BID stock, reflecting investor confidence.