The weekly capital market report of the week to March 22nd of Bao Viet Securities Company (BVSC) showed that in the week, the State Bank of Vietnam (SBV) net withdrew 4.895 trillion dong via Open Market Operation (OMO). Specifically, 7.588 trillion dong were withdrawn while 2.728 trillion dong were newly pumped.
On the bill channel, the SBV newly issued 37.5 trillion dong (on seven-day term at unchanged interest rate of three percent per annum), while 17 trillion dong matured in the week. Thus, the net withdrawal on bill channel reached 20.5 trillion dong.
Combining the two channels of OMO and bills, the net withdrawal in the week was 25.359 trillion dong. Up to now, the total OMO in circulation is 2.728 trillion dong, while the bills in circulation is 37.5 trillion dong.
From the beginning of the year until now, the SBV’s total net withdrawal was calculated at 90.179 trillion dong on OMO and bill channels. The cumulative net withdrawal trend has been maintained for six consecutive weeks. The SBV continued to use bill channel to carry out net withdrawal activities when the OMO in circulation has dropped to a low level of only 2.728 trillion dong.
On the interbank market, the interest rates in the week recorded a fairly strong reduction. Specifically, the overnight term dropped by 0.4 percent from 3.55 percent to 3.15 percent per annum. The one-week and two-week interbank rates also fell from respectively 3.45 percent and 3.65 percent to 3.3 percent and 3.4 percent per annum, respectively.
According to BVSC’s analysis team, the downtrend of the interbank rates is likely to be maintained in the coming weeks and the rates will decline to an average level of around three percent per annum for all terms.
