The State Bank of Vietnam in Hà Nội. — VNA/VNS Photo

HÀ NỘI — The greenback's exchange rate stabilised around VNĐ24,269 on Wednesday, marking the fourth consecutive day it has stayed under VNĐ25,000 after a short burst of demand in recent weeks.

According to ACB's financial market analysts, the market saw large purchases of the dollar, nearing US$400 million. In the same day, the State Bank of Vietnam injected $309 million into the banking system, bringing the amount of greenback sold by the central bank since the end of April to $950 million.

On the black market, the exchange rate was reported at VNĐ25,820, unchanged from the previous day.

According to the Vietnam Interbank Market Research Association, the interbank interest rate has stayed within the 5.28-5.43 per cent range. On Wednesday, government bonds' interest on the secondary market with terms of three to five years showed a slight decrease while seven, 10 and 15-year bonds showed a slight increase. The interbank collateral channel remained at 4.25 per cent after the central bank's recent offering of VNĐ8 trillion.

The dollar has surged by 5.9 per cent against the Vietnamese đồng since the beginning of the year, severely hurting domestic businesses' financial performance in the first and second quarters of 2024.

EVNGenco3 reported an after-tax loss of VNĐ 652 billion during the first quarter of this year, against a profit of VNĐ621 billion during the same period last year. The power company said the primary cause was the surging exchange rate as a large portion of its debt is in US dollar, Chinese yuan and Japanese yen.

Vinatex, one of Việt Nam's largest textile manufacturers, recorded VNĐ 3.95 trillion in revenue during the first quarter of 2024, a 6 per cent decrease year-on-year. However, the textile manufacturer reported a VNĐ 46 billion in exchange rate loss during the period, nearly double from the same period last year.

Century Synthetic Fiber Corporation recorded Q1's revenue was VNĐ 265.8 billion, an 8 per cent decrease year-on-year. Meanwhile, an exchange rate loss was reported at VNĐ 7.6 billion. Mobile World Investment Corporation also reported VNĐ 102 billion in exchange rate loss during the quarter.

Larger businesses reported large exchange losses. For example, Hòa Phát Group reported VNĐ414 billion in exchange rate loss during Q1 2024 and the number of Vietnam Airlines was VNĐ772 billion.

Despite of significant exchange losses caused by a surging dollar, the country's economic recovery has been robust, allowing companies to post higher after-tax profits. However, steps have been taken to address the issue.

Trần Đình Long, chairman of Hòa Phát Group, said the group plans to reduce its financial leverage in the near future.

Đỗ Đức Chiến, vice-chairman of PV Drilling, said companies with substantial amounts of debt in foreign currency can reduce risk by maintaining a healthy reserve of the dollar, only converting to Vietnamese đồng when necessary.

Mobile World said the group believes the exchange rate fluctuations were only short-term but advised businesses to remain cautious.

A series of measures have been taken by the central bank to rein in the exchange rate such as holding gold auctions, issuing additional treasury bills and selling foreign reserves. — VNS