Statistics of the State Bank of Vietnam (SBV) showed that the overnight rate soared to 5.12 percent per annum on the first day of the last week of the existing Lunar Year, the highest level since the beginning of 2019 On the six-month term, interest rates continued to stay above six percent, after surging to 6.28 percent per annum in the end of the previous week.
The interbank interest rates across the terms have sharply risen in the recent weeks when the currency market entered the peak period of Tet holiday. The SBV has continuously net injected into the market in the recent two weeks with respectively 4.962 trillion dong and 47.521 trillion dong.
Specifically, in the latest week, via Open Market Operation, the SBV made a forward purchase of 100.336 trillion dong on 21-day and 28-day terms, while 52.815 trillion dong matured in the week. According to statistics of Saigon Securities Incorporation (SSI) Retail Research, the volume of OMO in circulation sharply increased to 100.336 trillion dong. The amount of capital put into circulation through OMO channel is at the highest level in nearly two years.
Some banks experiencing liquidity tension are actively mobilising capital on the interbank market to meet the demand for dong. The borrowing/lending value among banks is around 37 48 trillion dong per day. The interbank rates, thus, have been pushed up.
However, this development is not surprising as the demand for cash often increases high in the last weeks of the Lunar Year to prepare for the needs of shopping and travelling, etc. In 2016 and 2017, the SBV also often injected capital to support banks’ liquidity.
In addition, on the unofficial and official market, the US dollar/dong exchange rate is also declining. According to expert, people’s sale of US dollars to gather dong is also the reason that lower the exchange rate level.
The listed exchange rate at banks is popular at 23,160 dong (buying) and 23,240 dong (selling) per US dollar. Meanwhile, on the free market, most shops are buying and selling US dollars at respectively 23,180 23,210 dong per US dollar.
From the beginning of the week, the central exchange rate was significantly reduced by 22 dong by the SBV to 22,858 dong per US dollar. However, the ceiling rate is still high at 23,544 dong per US dollar. The US dollar buying rate of the SBV is maintained at 23,200 dong per US dollar, only 10 dong less than the buying rate of shops. The amount of US dollars acquired by the SBV in the first three weeks of January was estimated to exceed one billion dong.
