According to the report of SSI Retail Research’s research division under Saigon Securities Joint Stock Company (SSI), last week (June 11-15), the State Bank continued to strengthen the issuance of Treasury Bills with an increased amount to 57.8 trillion dong, including the unexpected issuance of two trillion dong 91-day term at the interest rate of 1.8 percent. In the opposite direction, the amount of matured T-bills was just 10.1 trillion dong, causing the State Bank to net withdraw 47.7 trillion dong from the banking system.
This was the first net withdrawal week after three consecutive weeks of net injection. The volume of T-bills in circulation increased rapidly to 78.1 trillion dong.
In the interbank market, interest rates remained stable at the current level. At the end of the week, interest rates of terms did not change much from the end of the previous week, trading at 1.35 percent, 1.37 percent and 1.7 percent respectively for overnight, one week and one month terms.
In the world market, Fed officially raised its benchmark interest rate for the second time at its June 13 meeting, and the result had been anticipated. The US dollar decreased 0.29 percent following Fed’s decision but unexpected rebounded 1.43 percent on June 14 after the meeting of the Central European Bank (ECB).
ECB announced that it would terminate the quantitative easing programme at the end of this year but insisted on a sustainable adjustment and would not rush raising interest rates at least until the summer of 2019. This result caused the euro to fall dramatically i.e. 1.89 percent from the US dollar while pushing the US dollar to exceed this year’s peak. The US dollar Index increased to 95 points.
Fluctuations in the world market caused the domestic exchange rate to change accordingly. The banking market was still rather stable. The exchange rate slightly decreased to 22,77522,845 dong/US dollar. In contrast, the exchange rate on the free market has started to have remarkable increase to 22,910-22,925 dong/US dollar (up 65 dong in the week), the highest level since the beginning of 2017.
The central US dollar exchange rate was also raised consecutively by the State Bank during the week with a total of 37 points to 22,595 dong, equal to the ceiling of 23,273 dong.
Meanwhile, the domestic gold price also swelled suddenly to 37 million dong per tael, up about 300,000 dong from the previous week while the world gold price was still stable around $1,300/ounce. The price difference increased to more than one million dong per tael (three percent).
