Predicted Stable Exchange Rate for 2025
Stable Exchange Rates Predicted for 2025
2024 was a year focused on ensuring that the VND/USD exchange rate stays stable, and this goal will continue into the new year. Analysts believe that there may still be challenges in achieving price stability, but global inflation is expected to decrease further in 2025. This decline could lead central banks, including Vietnam’s State Bank (SBV), to adopt more accommodating monetary policies, which in turn could ease pressure on the VND/USD exchange rate.
The global economy showed resilience in facing major disruptions, such as the Covid-19 pandemic, geopolitical tensions, and extreme weather events, between 2020 and 2024. These disruptions caused global supply chain issues and energy and food crises, driving inflation to unprecedented levels. Major central banks responded by raising policy interest rates significantly to combat inflation.
Global inflation is now expected to decrease while economic growth continues to face challenges. The International Monetary Fund (IMF) projects a decline in global inflation but notes that economic growth is still hindered by various obstacles. In 2025, the expectation is for central banks around the world to ease monetary policies and introduce interest rate reductions to support exchange rates. However, challenges may arise from slow export growth and reduced foreign investments.
According to IMF projections, advanced economies are expected to see modest growth rates, while emerging markets and developing economies will maintain relatively stable growth rates. For Vietnam, GDP in purchasing power parity terms is predicted to reach $2.374 trillion by 2029, ranking it 21st globally. While there may be challenges in achieving price stability, global inflation is forecasted to continue decreasing.
To navigate financial challenges, the IMF recommends that central banks carefully adjust monetary policies to maintain exchange rate stability and financial security. The rise of the US dollar due to inflation in the US could impact countries reliant on imports and foreign debt. Flexible exchange rate regimes and targeted interventions are suggested to alleviate pressure. Governments are also encouraged to strengthen fiscal frameworks to support monetary easing and manage debt levels sustainably.
The IMF also calls for enhanced regulation of non-bank financial institutions, resilient debt management strategies, and reforms in debt restructuring processes to mitigate risks and promote global financial stability. These measures aim to support low-income economies in navigating the complexities of the current economic climate.
For Vietnam, as a highly open economy, global fluctuations have a substantial impact, especially on monetary policy management. In 2023, the SBV implemented significant policy changes, including several interest rate cuts, to manage the exchange rate effectively. With careful monitoring and strategic adjustments, stable exchange rates are anticipated for 2025.
