In the first three quarters of 2024, net profits from the foreign exchange trading segment of 29 Vietnamese banks reached more than VNĐ19.62 trillion, a 7 percent increase compared to the same period last year. State-owned BIDV led the sector with a net profit of over VNĐ3.92 trillion, marking a 25 percent year-on-year growth. Private banks also saw impressive results, with MB recording a 65 percent increase in profits, reaching nearly VNĐ1.52 trillion. The fluctuations in the USD/VND exchange rate, notably a 4.2 percent depreciation of the đồng against the dollar in October, significantly contributed to these gains, especially with the ongoing volatility of the global economy.

Despite the strong growth in foreign exchange profits, analysts caution that the pressure on the đồng is likely to persist. The USD’s rapid increase, driven by US economic data and Federal Reserve policies, is putting continued strain on the Vietnamese currency. With foreign exchange reserves at just 2.4 months of imports, down from the recommended 3-month level, the central bank faces challenges in stabilizing the currency without further impacting reserves. Analysts suggest that the State Bank of Vietnam (SBV) may need to implement additional measures, such as adjusting interest rates and fostering closer cooperation with key trading partners, to mitigate the negative effects of exchange rate fluctuations on the economy.

While the foreign exchange sector remains a strong contributor to banks’ profitability, the challenges presented by global economic trends require careful management of both domestic and international financial policies. Analysts predict that these pressures could continue to affect the foreign exchange market, making it crucial for Vietnam to adapt strategically in the coming months.

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