According to updates of Bao Viet Securities Company (BVSC), in the last week, the State Bank of Vietnam (SBV) net withdrew 24 trillion dong via treasury bills.
Specifically, the operator newly issued 53.998 trillion dong of bills on a seven-day term at interest rate of 2.75 percent per annum; while 29.998 trillion dong matured in the week,
On the Open Market Operation (OMO) channel, the SBV did not issue new bills and no maturity was recorded.
Thus, from the beginning of the year until now, a total of 110.507 trillion dong were net withdrew via OMO channel. The system’s liquidity remains positive, supporting capital to be withdrawn via bills at low interest rates.
One of the main causes of the abundant capital is the sale of capital in businesses to foreign investors in the last two years. Accordingly, the SBV has bought a large amount of foreign currency in 2018 and the first half of 2019. Purchasing foreign currency also means injecting a similar amount of capital into the economy.
In a related development, the recent reduction of 0.25 percent in bill interest rate by the SBV also influenced and made the interbank interest rates to further go down.
The interbank interest rates across the terms continued the downtrend in the last week, maintained below three percent per annum. For overnight and one-week terms, interest rates respectively declined from 2.7 percent and 2.9 percent to respectively 2.65 percent and 2.7 percent per annum. For two-week term, interest rate slightly increased by 0.05 percent to 3.15 percent per annum.
Nevertheless, it must be said that the lowering of bill interest rates only impacted interbank interest rates and government bond yields. If deposit rates are not reduced, lending rates will continue to be at high level as at the present time.
