Market Highlight 21.04.2026

According to recent forecasts, the People’s Bank of China may allow the CNY to appreciate to a record level this year in order to strengthen confidence in the currency and enhance the purchasing power of the economy. Base-case forecasts suggest USD/CNY could fall to 6,7, or even further to 6,2 - 6,4 this year, allowing the exchange rate to better reflect the strength of the Chinese economy. The CNY has generally been little affected by the conflict in Iran, while the sharp rise in oil prices has shaken other markets around the world. The CNY has appreciated by around 2,5% against the USD since the beginning of 2026, following a 4,4% gain last year. At present, the People’s Bank of China is still restraining the pace of CNY appreciation through its daily reference rate fixing. The Central Bank’s efforts to limit further gains in the CNY may be intended to protect China’s export competitiveness, especially as data showed export growth slowed sharply in March. However, economic growth rebounded more strongly than expected in the first three months of 2026, suggesting that the spillover impact from the war in Iran has been limited. Chinese exporters are estimated to be holding as much as 2,5 trillion USD offshore, and a stronger CNY would create greater incentive for companies to repatriate those foreign-currency holdings.

The USD Index fell nearly 0,2% yesterday as the market remained optimistic that a peace agreement in the war in Iran could still be reached despite escalating tensions between the parties over the weekend. Crude oil prices rose more than 5% on Monday as the blockade of the Strait of Hormuz continued.

Domestically, interbank USD/VND continued to hold around the 26.335 area at yesterday’s close. The effective central rate for the day was 26.358, up slightly by 1 dong from the end of last week.

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