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Right Now, a Weak Dong Could be Good for Vietnam. Here’s Why.
The depreciation of the Vietnamese dong has picked up speed since the Lunar New Year break with the State Bank of Vietnam easing its intervention efforts. This is not, however, necessarily a bad thing and could even be a good thing in certain circumstances. With this in mind, this article looks at Vietnam’s monetary policy and how it is changing, who benefits from a stronger dong, who benefits from a weaker dong, and how these outcomes are connected… Read More »
Banking and finance News
State Bank continues open market operations
The State Bank of Vietnam has continued to carry out open market operations. Specifically, there were US$3.05 billion worth of reverse repos outstanding as of the close of business March 6 and US$156.89 million in treasury bills outstanding.
Of note, it appears the State Bank has changed tack and is now allowing the dong to fall rather than use foreign currency to prop it up. This has seen a big drop in the value of the dong. Since the start of the year, the local currency has lost 1.63 percent against the greenback. This is notably an increase from just 1.45 percent this time last week.
See also: The Vietnamese Dong’s Wild Ride: Unpacked
State Bank Deputy Governor raises concerns re: private debt to GDP
Deputy Governor of the State Bank of Vietnam Dao Minh Tu has raised concerns with respect to Vietnam’s private debt to GDP, currently about 135 percent, with a private lending growth target that if reached will see that figure hit around 145 percent.
“From a macro perspective, this is a problem that we are worried about but we still have to try, according to the political determination of the Party, Government and all levels,” he said.
This is noteworthy in that it shows that the people entrusted to implement the Government of Vietnam’s economic growth strategy are not necessarily entirely on board.
See also: It’s Time to Talk About Vietnam’s Credit Growth Policy…
Car news
Vietnam electric car registration fee exemption extended by 2 years
An exemption to registration fees for electric vehicles that was set to come to an end Friday has been extended for two years per government Decree. The Ministry of Finance has estimated that the extended cut could cost the budget around VND 4,800 billion (US$187.8 million) a year.
Notably local car maker, VinFast, had petitioned the government to have the exemption extended by three years, arguing this would support Vietnam’s green energy transition (though supporting its own business interests as well), according to a report in Lao Dong.
Of note, VN Express is reporting that 6,600 electric vehicles were registered in Vietnam per month in 2024, equivalent to 79,200 units a year. Of note, VinFast reported electric car deliveries in Vietnam of 87,000 electric vehicles in the same year.
See also: Media Relations in Vietnam: Lessons from VinFast
Economy news
Vietnam’s CPI rises in February due to higher pork, dining, and housing costs
Vietnam’s consumer price index (CPI) in February increased by 0.34 percent compared to the previous month, marking a 1.32 percent rise from December 2024 and a 2.91 percent increase year-on-year. The main factors driving this rise include higher pork prices due to supply shortages, increased costs for dining out, rental housing, and transportation services, all influenced by consumer demand, according to Vietnam’s General Office of Statistics.
See also: Vietnam CPI Tracker: January Update [data set]
Manufacturing news
Vietnam’s PMI records slight jumpy in February
The S&P Global Vietnam Manufacturing Purchasing Managers’ Index recorded a small jump in February over January, increasing from 48.9 points to 49.2, according to a press release from the firm. This is still below the 50-point no-change point signalling the sector is still in a contractionary phase.
The report notes that weak demand, both domestically and internationally, led to a solid drop in export orders for the fourth straight month. Production also fell for the second month in a row.
Employment levels continued to decline for the fifth month, though job cuts eased compared to January. Despite workforce reductions, spare capacity remained as outstanding business fell at the sharpest rate in 16 months.
Moreover, purchasing activity increased slightly, driven by improved business confidence—the highest since June 2024—and concerns over supply-chain disruptions. Supplier delivery times lengthened further, marking the worst delays in five months due to transport issues.
Input costs continued to rise due to higher freight and raw material prices, though at the slowest pace in 19 months. However, manufacturers reduced selling prices for the second consecutive month to counter weak demand, with the decline slightly steeper than in January.
See also: Manufacturing in Vietnam
Media news
Vietnamnet and VN Express set for merger
The Prime Minister of Vietnam has requested a merger between the semi-privately owned news outlet VNExpress and the mouthpiece of the Ministry of Information and Communications, VietnamNet as part of the restructuring of the Vietnamese government.
Of note, all official media in Vietnam is in one way or another controlled by the state with the same stories (often word for word) reproduced in multiple news outlets. With this in mind, broader efforts to condense the number of media outlets may not make a significant difference to news coverage. That said, VNExpress is more of a tabloid whereas VietnamNet is generally a little more serious and in this context it will be interesting to see where the tone of the merged news outlet will land.
See also: Vietnam News Media Regulations: An Overview
Stock market news
Foreign traders net-sell US$63.3 million of HoSE stocks
Over the last five trading sessions to the close of business on March 6, foreign investors net-sold US$63.3 million worth of HCMC Stock Exchange stocks. This brings the total net-sold since the start of the year to US$655.1 million or US$4.2 billion since January 1, 2024.
See also: Vietnam’s Foreign Investor Stock Sell-Off: Unpacked
Foreign trader activity, last five trading days
| Buy | Sell | Change | ||||
| Date | VND | US$ | VND | US$ | VND | US$ |
| 28/2 | 1,840 | $72.13 | 2,825 | $110.74 | -985 | -$38.61 |
| 3/3 | 2,101 | $82.36 | 2,478 | $97.14 | -377 | -$14.78 |
| 4/3 | 2,119 | $83.07 | 2,444 | $95.81 | -325 | -$12.74 |
| 5/3 | 4,367 | $171.19 | 4,726 | $185.26 | -359 | -$14.07 |
| 6/3 | 2,855 | $111.92 | 2,423 | $94.98 | 432 | $16.93 |
| Total | 13,282 | $520.66 | 14,896 | $583.93 | -1,614 | -$63.27 |
VND = billions; US$ = millions; source: Vietnam Stock Market Tracker
Technology news
Vietnam looking at launching government-owned crypto exchange
Vietnam’s Deputy Minister of Finance has announced the Ministry will facilitate the development of a pilot cryptocurrency trading program. The details are expected to be revealed later this month.
Notably, this article from VNExpress outlines the development of digital asset trading exchanges to be administered by the government (presumably the State Securities Commission or a new body with similar functions). The article also carries comments from the Deputy Minister in which he suggests that these exchanges could be used to raise capital.
This is interesting in that Vietnam will essentially be creating a centralised system for an asset that has gained in popularity in large part because it has been built on a decentralised system. Moreover, with so many exchanges offering cross-border services it’s not clear why anyone would choose to use an exchange developed and owned by the Government of Vietnam.
See also: Why Cryptocurrency in Vietnam Is So Popular: Unpacked
Trade news
Exports
Vietnam’s exports fell to US$31.1 billion in February, down from US$33.2 billion in December. This represents a fall of 6.27 percent, however, it should be noted that the last week of January saw most businesses in Vietnam closed for the Lunar New Year holiday. It could be that businesses were just a little slow to start back up. Also, February is only 28 days vs January’s 31.
See also: Vietnam Exports Tracker: February Update [data set]
Imports
Vietnam’s imports reached US$32.7 billion in February, an 8.6 percent jump compared to January. Notably, this could be explained by the Lunar New Year holiday which saw most factories and businesses shut down for the last week of January.
See also: Vietnam Imports Tracker: February Update [data set]
The week ahead
There are a handful of events coming up this week. For more information, see the: Doing Business in Vietnam: Events Directory 2025
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