With only 1 day left until October ends with the continuous and unpredictable fluctuations of the USD, the financial world is currently silent, waiting for the October data update.
Exchange rate increased sharply from the beginning of October
According to Mr. Nguyen Viet Duc – Director of Digital Business of VPBank Securities (VPBankS), exchange rate is always a factor that investors should pay attention to because it reflects all stories about inflation, interest rate differentials and cash flow.
In October, the domestic exchange rate was much “hotter” than the previous period. Partly due to the very strong increase of the USD in the international market, with the DXY index measuring the strength of the USD increasing from just over 100 points at the end of September to over 104 points currently.
The difference is that the import-export situation up to the end of the third quarter, as announced by the General Statistics Office, shows that although the trade balance is still in surplus, it tends to decline. Specifically, the export turnover of goods in September 2024 reached 34.05 billion USD, down 9.9% compared to the previous month; the import turnover of goods in September 2024 was preliminarily 31.76 billion USD, down 5.9% compared to the previous month. The trade balance of goods in September still had a trade surplus of 2.29 billion USD, down to just over half of the trade surplus of 4.53 billion USD in the previous month.
In addition, preliminary statistics from the General Department of Customs show that the total value of Vietnam’s import and export of goods in the first period of October 2024 (from October 1 to October 15, 2024) reached 31.93 billion USD. The total value of Vietnam’s import of goods in the first period of October 2024 reached 15.78 billion USD, down 5.8% (equivalent to a decrease of 968 million USD in absolute terms) compared to the results in the second half of September 2024. With the above figures, the trade surplus in the first half of October was only 0.37 billion USD.
Furthermore, data on the overall balance of international payments compiled by the State Bank of Vietnam shows that the economy had a deficit of 6.066 billion USD in the second quarter of 2024.
Discussing this issue, some experts also said that, usually in October every year, the demand to buy USD to import to serve the year-end export demand for Christmas and New Year in the West pushes the exchange rate up. On the other hand, the “demand” for USD has recently increased to fulfill international debt payment obligations, pushing the price of this currency up.
By the end of October, the exchange rate seemed to have cooled down in recent days. However, speaking to VTV Times reporter, financial expert Nguyen Tri Hieu said that up to this point, there has been no conclusion on the “answer” about the USD’s upward trend. The most accurate answer must wait for the results of the US election.
Thus, in the context of the recent devaluation of the VND, while the Fed has two more policy meetings from now until the end of the year, closely monitoring the foreign exchange market is extremely important for domestic investors.
Currency Market: Still Waiting for October Data
In the current situation, import-export developments and FDI disbursement are quite important “supports” for the economy in terms of balancing foreign currency supply and demand. Therefore, the domestic financial sector is currently “frozen” waiting for the General Statistics Office to officially announce socio-economic data for October.
In fact, many economic experts are quite optimistic about some important data in October. At the recent seminar ‘Policy Dialogue: Growth Recovery – Prospects and Challenges’ organized by the Vietnam Institute for Economic and Policy Research (VEPR), experts commented that despite facing many difficulties and challenges, especially in the context of complex and unpredictable developments in the global economic outlook, prolonged geopolitical conflicts, high world inflation, negative impacts of climate change, etc., Vietnam’s macro economy is still positive in most aspects. Notably, import and export of goods are increasing faster than expected and exports will accelerate in the last months of the year.
In addition, experts also said that Vietnam’s economy has improved dramatically in quality and efficiency because it has great resilience to natural disasters and instability in the world. The industrial sector is making spectacular recovery steps. “The acceleration of FDI capital in September may continue in October and the following months. It is very likely that in the last months of the year, realized FDI capital will reach a record high,” Mr. Hieu emphasized when talking to reporters.
Thus, it can be seen that, in the current context, some experts and investors are waiting and expecting the recovery of global markets, thereby creating momentum to increase export turnover – a bright spot of the Vietnamese economy in the last quarter of 2024./.