Fed rate hike impacts business community

After the US Federal Reserve (Fed) adjusted to increase USD interest rates, it affected the foreign exchange market and businesses.

On December 17, at commercial banks in Ho Chi Minh City, the US dollar exchange rate all increased to the ceiling level, the listed price at banks was 22,547 VND/USD.

In the free market, the USD price as of the afternoon of December 17 was 22,785 VND/USD, an increase of 25 to 30 VND/USD compared to yesterday, a difference of nearly 150 VND/USD compared to the bank exchange rate.

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With the Fed raising interest rates this time, many import and export businesses believe that they benefit from exporting, but import is facing many difficulties due to the increase in prices of machinery, equipment and raw materials. Thai Son Corporation imports 2-3 million USD worth of plastic pellets each month to produce plastic products. This adjustment increases the company's raw material import costs by 150-200 million VND per month.

Mr. Tran Viet Anh, General Director of Thai Son Joint Stock Corporation, said that this exchange rate change puts pressure on revenue and costs. At this time, some raw material suppliers are also increasing their price negotiations when the USD price increases.

According to Mr. Son, at this time, the State Bank must find a way to release the reserve dollars to balance the market so that the dollar does not increase in value anymore.

After the Fed raised the USD interest rate, many businesses are waiting for the State Bank's monetary policy and USD exchange rate. This will affect the production and business development plans of businesses in the coming time.

Economist Bui Chi Hieu said: “This is something that everyone is very concerned about, how will we handle such great pressure? The State Bank has committed to not increasing the exchange rate from now until the beginning of the year. The State Bank is persistent with that goal, but the problem is how we will bear that pressure and how much it will cost. The cost is that we always sell foreign currency to intervene in the market. However, how much foreign currency does the State Bank have left to intervene in the market?”

Some people are also worried that when the USD interest rate increases, it will affect the flow of indirect investment capital into emerging markets, including Vietnam. Investors will gradually withdraw this capital back to the US market. However, many opinions say that this is not a cause for concern.

According to VOV