*SBV net injects for third consecutive week
According to the weekly monetary report for April 9-13 by Saigon Securities Incorporation (SSI), the State Bank increased its Treasury bill issuance again with the total volume of 49.3 trillion dong. The amount was not equal to the matured T-bills of 58.1 trillion dong. Therefore, an additional of 8.8 trillion dong was injected into the system last week.
The money injection trend has been maintained for third consecutive week. However, the volume decreased compared to 26.3 trillion dong last week.
The interbank interest rates increased slightly but were still low. Specifically, overnight and one-week interest rates remained below one percent, equal to 0.85 percent (up 0.15 percentage points), and 0.98 percent (up 0.14 percentage points). Longer terms of one month and three months increased less with 0.06 percentage points, to 1.43 percent and 2.43 percent.
*10-year and 15-year tenor bonds on high sales
Last week, the State Treasury increased the bid invitation volume to four trillion dong for three terms of five years, 10 years and 15 years. The 10-year and 15-year terms saw the issuance of one trillion dong each, a positive result after many unsuccessful issuances in March.
This result was thanks to the State Bank’s acceptance to raise interest rates of each term by 0.05 percentage points, a signal showing that interest rates bottomed up after a long period of going down.
Meanwhile, only 65 billion dong 5-year tenor bonds were issued, as the State Treasury still remained the interest rates at 2.97 percent. As such, last week, the State Bank issued a total of 2.065 trillion dong bonds, raising the total issuance volume from the beginning of the year to 43.073 trillion dong.
*Bond market fluctuates in reverse direction
The secondary bond market witnessed yields of terms to fluctuate in reverse directions. Though the trend on interest rate reduction on the primary market has slowed down, the short-term bond yields in the secondary market have fallen quite sharply.
The one-year and two-year terms fell 0.23 percentage points and 0.22 percentage points to 2.06 percent and 2.33 percent, the lowest level in the history since 2012. The 3 year5 year terms slightly decreased by 0.04 percentage points while the 7year15 year terms increased about 0.09 percentage points, equal to fluctuations in the primary market.
The interest rate difference among terms has widened and the interest rate curve continued to climb up.
The market liquidity is maintained at very good level with 65 trillion dong last week. The purchasing power from foreign investors also increased again, causing this sector to net purchase 463 billion dong.
*US dollar remains stable despite escalating geopolitical tensions
In the world market, political tensions increased last week related to Syria. On the contrary, the US’s consideration to join TPP again was considered as a positive move after trade tensions with China.
The foreign currency market almost did not react to these moves, and the value of the US dollar still remained stable around 90 points, ending the week at 89.8 points, down 0.34 percent from the previous week.
In the domestic market, the US dollar exchange rate stabilised again, slightly decreasing in both interbank and free markets, equal to the transaction volume of 22,755 dong/22,825 dong (down 25 dong), and 22,780 dong/22,795 dong (down 20 dong).
The gold price increased slightly when the cash flow sought to secured assets, i.e., up 0.88 percent to $1,345/ounce. The domestic gold price continued to cling very closely to the world gold price, leading to negligible gap between domestic and world gold price i.e. 120,000 dong (equal to 0.3 percent).
