On March 13th, the dong interest rates on the interbank market continued to follow a downtrend with fairly strong declines. The system liquidity was abundant again after the peak season for payment in the Lunar New Year holiday.
Updated data from the Economic Research centre of Maritime Commercial Joint Stock Bank showed that the average dong interbank interest rate continued to fall sharply by 0.11-0.14 percentage points on all terms compared to the previous session.
Specifically, the dong overnight rate deeply fell below four percent per annum to only 3.63 percent per annum, while one-week, two-week and one-month rates were respectively 3.73 percent, 3.84 percent and 3.96 percent per annum.
The average Us dollar interbank rate slightly increased by 0.01-0.02 percentage point on most terms, except for one-month term which saw a decline of 0.03 percentage point. The difference with dong interbank rates was still significant. The average overnight rate, one-week, two-week and one-month US dollar rates were recorded at respectively 2.5 percent, 2.6 percent, 2.67 percent and 2.8 percent per annum.
The strong downward trend of the dong interbank rates was clearly seen after the peak payment season in the Lunar New Year ended. The cash flows have then quickly returned to the system, reflected through the cooling interest rates and the balances in the State Bank of Vietnam (SBV)’s regulation.
In particular, in the period close to the Lunar New Year holiday, the system recorded up to 150 trillion dong in circulation on mortgage channel. With great support from the SBV, this source quickly declined, gradually matured with outstanding balance in circulation by March 13th of only 10.404 trillion dong.
Notably, with the abundant capital source, March 13th marked the first session in which the SBV issued bills to withdraw money. The bill issuance on March 13th was five trillion dong on seven-day term, at interest rate of three percent per annum, and fully absorbed by credit institutions.
These above regulations went along with the foreign currency purchase continued by the SBV after the Lunar New Year holiday, after the agency acquired a large amount of about four billion US dollars earlier.
