The dong has directionally moved in line with other Asian currencies amid the recent sell-off but has weakened by much less. Economists at ANZ Bank expect the VND to strengthen throughout the year and forecast USD/VND at 22,700 by end-2022.

Slower pace of reserve accumulation by the SBV to boost the dong

“We believe the recovery in Vietnam’s economy, aided by exports and resilient FDI inflows, will continue to buttress fundamentals. However, some risks are on the radar, especially from high oil prices and a potential slowdown in Europe that can weigh on exports.” 

“Our baseline forecasts project a decent BoP support, which, along with a slower pace of reserve accumulation by the SBV, means that the strengthening bias for VND will likely continue.” 

“We forecast USD/VND at 22,700 by year-end.”