According to experts, if the U.S. Federal Reserve (Fed) is forced to make deeper rate cuts, it could be a sign that the U.S. economy is weakening, which would reduce import demand. This would be unfavorable for Vietnam’s exports, leading to a decline in a key source of foreign currency supply and putting pressure on the exchange rate.
The Federal Reserve cut its benchmark interest rate by another 25 basis points at its September meeting and is expected to continue lowering rates in the remaining two meetings of 2025, amid signs of a weakening U.S. labor market. A decline in USD interest rates will narrow the interest rate gap between the USD and the VND, thereby reducing the incentive to hold U.S. dollars.
Speaking with VnEconomy, Mr. Nguyễn Hoàng Linh, Director of Research and Analysis at Vietcombank Fund Management (VCBF), said that a weaker USD also reduces the attractiveness of U.S. financial assets—especially as U.S. stock valuations remain high (the S&P 500 is currently trading at a forward P/E ratio of over 23 times, much higher than the 17–18 times seen before the Covid-19 pandemic).
“The upgrading of Vietnam’s stock market classification will help attract more foreign capital inflows, thereby supporting the balance of payments and stabilizing the exchange rate.”
(Mr. Nguyễn Hoàng Linh, VCBF)
In addition, the U.S. economy is likely to continue slowing down due to the impact of tariff measures, prompting international capital flows to shift toward emerging markets.
However, Mr. Linh also cautioned that if the Fed cuts rates more aggressively (for example, by 50 basis points or more), this could reflect a rapid deterioration in the U.S. economy. In that scenario, weaker U.S. growth would reduce import demand, adversely affecting Vietnam’s exports—a key source of foreign currency inflows. Consequently, the exchange rate could face renewed upward pressure.
Beyond the Fed’s monetary policy, Mr. Nguyễn Hoàng Linh noted that the USD/VND exchange rate is also supported by domestic factors such as a positive trade balance, solid foreign direct investment (FDI) disbursements, and a strong recovery in tourism.
In particular, Decree No. 232/2025/NĐ-CP on gold trading management, effective from October 10, 2025, allows enterprises to import raw gold and produce gold bars. This could improve supply, narrow the gap between domestic and international gold prices, and reduce the demand for foreign currency used in smuggled gold imports.
“If the Fed cuts rates more aggressively (for example, by 50 basis points or more), this could reflect a rapidly worsening U.S. economy. In that scenario, weaker U.S. growth would reduce import demand, negatively impacting Vietnam’s export sector—a major source of foreign currency. Consequently, the exchange rate could come under upward pressure.”
(Mr. Nguyễn Hoàng Linh, VCBF)
Earlier, macroeconomic data released by the General Statistics Office (Ministry of Finance) showed several positive signals that could help ease exchange rate pressures in the final months of 2025.
First, Vietnam’s average monthly trade surplus reached nearly USD 3 billion during June–August 2025, much higher than the average of less than USD 0.9 billion per month in the first five months of the year.
Second, in the first eight months of 2025, FDI disbursements reached USD 15.4 billion, up 8.8% year-on-year. Notably, disbursements from April to August increased by 9.6% year-on-year. Vietnam continues to stand out as a key destination in the global “China Plus” supply chain diversification strategy, especially as tariff differentials between Vietnam and competitors like India have become more favorable (Vietnam: 20% vs. India: 50%).
Third, international visitor arrivals in the first eight months of the year rose 21.9%; revenues from international tourists in the first half of 2025 reached nearly USD 15 billion, up 21.2% year-on-year—providing an additional source of foreign currency for the economy.
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