Impact of Fed Policies on Currency Market and Exchange Rate Outlook for 2026-2027

Key pointsWhile the Federal Reserve's interest rate hike policy is exerting some pressure on the currency market, UOB experts maintain a positive outlook for the Vietnamese Dong towards 2026-2027. The State Bank of Vietnam's (NHNN) flexible monetary policy and proactive management techniques have effectively mitigated the risks of currency depreciation, although external macroeconomic challenges remain.
Business impactJapanese companies should strengthen their currency risk management and closely monitor exchange rate trends, particularly as they may be affected in their import and export operations.

Key pointsOn September 17, 2026, the Vietnamese flag was displayed on the large screen of the New York Stock Exchange (NYSE) with the message, "Congratulations Vietnam! From Frontier to Emerging Market." This celebration marks the upgrade of Vietnam's stock market to an emerging market by FTSE Russell, showcasing the country's economic growth and international trust. Alex Hong from NYSE praised the efforts of the Vietnamese people, government, and businesses, expressing expectations for improved market liquidity and expanded access to international capital.
Business impactThis upgrade is likely to promote foreign investment inflows into the Vietnamese market, providing new business opportunities for Japanese companies. Companies involved in the capital market should closely monitor future trends and reassess their strategies.

Key pointsThe Federal Reserve (Fed) raised interest rates by 0.25 points, setting the federal funds rate range at 3.75% to 4%. As a result, global gold prices reached $4,360 per ounce, and both the U.S. and Vietnamese stock markets saw gains. Notably, the U.S. stock market was driven by technology stocks, with the Dow Jones Industrial Average rising by 0.61%. The VN-Index in Vietnam also reached 1,822.77 points, indicating expectations for a short-term upward trend.
Business impactJapanese companies need to consider the increased cost of financing due to rising interest rates and the impact of currency fluctuations. Particularly in import and export operations, managing risks related to gold price fluctuations is crucial.

Key pointsViettel and CMC have filed a complaint with the Ministry of Industry and Trade regarding EVN's application of commercial electricity rates to data centers. EVN explained that while production electricity rates are applied in other regions, different rates are applied in specific areas. The operating costs for data centers have increased by over 50%, which could severely impact the country's digital infrastructure.
Business impactJapanese companies may face challenges in maintaining IT infrastructure due to rising operating costs for data centers. It is essential to reassess strategies for cost management and ensuring stable electricity supply.

Key pointsTechcombank will announce its asset management solution 'Techcom Wealth' on September 19, discussing intergenerational asset management and preservation. Currently, there are approximately 1,233 affluent individuals in Vietnam, with this number expected to increase by 59% by 2031. As a new generation of affluent individuals emerges, the demand for asset management is rising.
Business impactJapanese companies need to understand the asset management trends in the Vietnamese market and strengthen services aimed at high-net-worth individuals. The financial sector should consider offering services tailored to customer needs.

Key pointsThe Vietnam Small and Medium Enterprises Association has proposed the establishment of a specialized digital bank for small and medium enterprises (SMEs) and individual business owners. This initiative aims to address credit provision challenges and facilitate funding for SMEs, which currently make up 98% of all businesses and play a crucial role in the economy, yet face significant barriers to financing.
Business impactThe establishment of this digital bank will provide new funding options for SMEs, and Japanese companies should pay attention to this development.

Key pointsAt the New York Stock Exchange (NYSE), a message celebrating Vietnam's upgrade from frontier to emerging market was displayed alongside the red star flag. This event symbolizes the enhancement of Vietnam's position in the international capital market, with NYSE's Alex Hong praising the efforts of the Vietnamese people, government, and businesses. Vietnam is expected to strengthen its connections with international markets and expand opportunities for capital inflow.
Business impactJapanese companies should monitor this development and assess its impact on relevant transactions, contracts, and local operations.