With the State Bank of Vietnam setting the mid-point rate for the dollar/dong at the highest level so far this year on Tuesday, banks in the Southeast Asian country quoted the greenback at rates just shy of the VND22,900 mark.

The State Bank of Vietnam, the country’s central bank, set the mid-point rate for the dong currency at 22,605 to the dollar for interbank transactions on Tuesday, up VND9 dong, or 0.84 percent from Monday.

This is the highest mid-point rate increase since the beginning of this year, according to economic news site VnEconomy.

The central bank adjusts the mid-point rate for the dollar/dong on a daily basis in a bid to stabilize the foreign exchange market.

Banks are allowed to trade the greenback within +/- 3 percent of the mid-point.

Analysts have attributed the dollar price increases to the fact that the mid-point rate surpassed the VND22,600 mark on Tuesday.

Eximbank quoted the dollar at VND22,820, VND30 and VND60 higher than its respective rates on Monday and earlier this week.

Vietcombank and Vietinbank set respective asking prices of VND22,800 and VND22,884 to the dollar.

As of the end of Tuesday, Sacombank listed the dollar at the highest rate among Vietnam’s banking system, VND22,895 per dollar.

Bid prices for the greenback also jumped VND70 to VND22,810 a dollar at different banks in the country.

On the unofficial market, the dollar was quoted at VND22,890-22,900, almost unchanged from previous days, whereas the bid price was set at VND22,850.

U.S. dollars began to strengthen in Vietnam from May 24, and have had the biggest gains from the beginning of this week.

Local economic expert Ngo Xuan Hai said the dollar price surges in Vietnam have been in line with a global trend, against the backdrop of an expected interest rate hike by the U.S. Federal Reserve System by June and higher U.S. bond yields.

“The State Bank of Vietnam has so far increased the mid-point rate by a total amount of VND47, which is also responsible for the dollar’s gains,” Hai added.

On the other hand, local lender Vietinbank said individual customers and banks have increased their purchase of foreign currencies for personal or business purposes, leading to the price hikes.

On Wednesday, the central bank set the mid-point rate at VND22,590, down VND15 from the day before.

With the dollar/dong trading band set at +/- 3 percent of the mid-point rate, the ceiling price for the dollar is VND23,2649, and the minimum price VND21,914.

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