The Vietnamese dong has continued its downward trend, reaching a new low of 26,401 per U.S. dollar on Thursday, weakening by as much as 0.1%. This depreciation is being driven by increased government spending on infrastructure projects, which has raised import demand, alongside declining export revenues due to shifts in U.S. trade policy. n nWith public investment in transportation, energy, and urban development accelerating, Vietnam’s need for imported construction materials and machinery has surged. This has widened the trade imbalance and placed downward pressure on the local currency. MUFG Bank forecasts the exchange rate to reach 26,500 per dollar by the end of 2025, citing a shrinking current-account surplus and growing external demand for foreign-denominated goods. Ho Chi Minh City Securities projects an even weaker level, anticipating the dong to settle at 26,600 against the greenback by year-end. n nThe currency’s decline reflects broader macroeconomic strains. While infrastructure development is intended to boost long-term productivity and attract foreign investment, the short-term impact includes higher import bills and reduced external buffers. At the same time, American trade measures have dampened export growth, particularly in manufacturing sectors such as electronics and textiles, further limiting foreign exchange inflows. n nPolicymakers face a balancing act between sustaining development momentum and maintaining currency stability. Without tighter monetary control or improved export performance, the downward trajectory of the dong may persist. n— news from Bloomberg.com
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Dong Weakness Grows as Vietnam Boosts Infrastructure Spending
The Vietnamese dong, already at record lows, is facing mounting pressure from the government’s infrastructure spending spree and a hit to exports from US trade policy. n nThe dong weakened as much as 0.1% to 26,401 per dollar Thursday, a fresh record. MUFG Bank expects it to trade at 26,500 against the greenback by year-end, citing higher import needs and a narrowing current-account surplus. Ho Chi Minh City Securities sees the currency finishing 2025 at 26,600 per dollar.