The Swedish krona recently hit its lowest level of the year against the US dollar, with an exchange rate of 11.01 krona per dollar. This depreciation comes amid rising long-term interest rates in the US and a strengthening dollar following Donald Trump’s victory in the US presidential election on November 5. This situation poses significant challenges for Vietnamese exporters.

Impact on Vietnamese Exporters

The weakening krona means that Vietnamese exports to Sweden, typically traded in US dollars or euros, become more expensive when converted into the local currency. As a result, Swedish importers face higher costs, potentially reducing their purchasing power and demand for Vietnamese goods. This could negatively impact sales volumes and competitiveness for Vietnamese businesses in the Swedish market.

Additionally, the depreciation creates pricing challenges for exporters who must balance maintaining profitability while remaining competitive in a price-sensitive market.

Strategic Adjustments for Exporters

In light of the current exchange rate volatility, Vietnamese exporters need to take proactive measures to mitigate risks and adapt to the changing market conditions:

1. Cost Optimization: Streamline operations to reduce costs and maintain profit margins.
2. Pricing Strategy: Adjust pricing structures to align with market dynamics while staying competitive.
3. Exchange Rate Monitoring: Closely monitor fluctuations in the krona and assess their impact on pricing and profitability.
4. Policy Awareness: Stay informed about potential changes in US trade policies under Trump’s administration, including the possibility of increased import tariffs, to prepare for any shifts in global trade conditions.

Expert Insight

Jens Magnusson, Chief Economist at SEB, predicts that the krona may remain weak against the dollar and euro in the near future. This underscores the importance of flexibility and strategic agility for Vietnamese businesses looking to navigate the Swedish market during this period of economic uncertainty.

Vietnamese exporters must remain vigilant, adaptable, and forward-thinking to overcome these challenges and sustain their foothold in the Swedish market.

(Vietnam Trade Office in Sweden)