Bao Viet Securities Company (BVSC) has released the market report for the past week of February 25th to March 1st 2019. Accordingly, during the week, the State Bank of Vietnam (SBV) net withdrew 9.710 trillion dong through Open Market Operations (OMO) channel, with 28.681 trillion dong of maturity and 18.972 trillion dong of new issuance. The net withdrawal in the past week was much lower than the 72 trillion dong recorded in the week from February 18th to February 22nd 2019.
From the beginning of 2018 until now, the amount of capital net injected through OMO channel and bills continued to decline, reaching 33.106 trillion dong in the end of last week. The downtrend of net injection has been maintained for three consecutive weeks, showing that the liquidity of the banking system is in a fairly stable state with less support from the SBV.
Meanwhile, the interbank interest rates in the past week also continued to fall slightly. In particular, the overnight term and two-week rates respectively dropped from 4.05 percent and 4.15 percent per annum in the previous week to respectively 3.95 percent and 4.1 percent per annum.
As forecasted by BVSC, the downtrend of the interbank interest rates is likely to be maintained in the coming weeks and decline to an average of around three percent per annum for all terms.
The mobilisation interest rates on market 1 still moved sideways within the levels set from the end of 2018. Compared to the end of 2018, the group of four state-owned banks still kept the average mobilisation rate of one-year deposits at 6.83 percent per annum.
In general, the mobilisation interest rates of joint stock banks increased slightly by 0.22 percent in February. However, that of banks with charter capital of less than five trillion dong reduced mobilisation slightly by 0.03 percent. BVSC forecasted that the mobilisation interest rates of banks will be stable in the near future, and can fall slightly in some banks with abundant liquidity.
Compared to the previous week, the central reference rate increased by 17 dong from 22,906 dong per US dollar to 22,923 dong per US dollar. Meanwhile, the exchange rate at commercial banks saw opposite movement when declining from 23,215 dong per US dollar to 23,201 dong per US dollar. In general the exchange rate has been still in a fairly stable trend since the beginning of 2019 until now.
As explained by BVSC, the main reason was due to the relatively abundant remittances transferred to Vietnam during the Lunar New Year holiday. In addition, the disbursement of Foreign Direct Investment (FDI) and Foreign Indirect Investment (FII) recorded fairly positive developments in the first two months of the year. Specifically, the FDI disbursement reached 2.58 billion US dollars, up by 9.8 percent compared to the same period of 2018, while on the HCM City Stock Exchange (HoSE) and Hanoi Stock Exchange (HNX), foreign investors also net purchased 3.527 trillion dong from the beginning of 2019. The bond market also recorded a net purchase of 3.942 trillion dong from the beginning of 2019.
With a positive supply of foreign currencies, SSI believed that the exchange rate will tend to level off and fluctuate in a narrow range in the short term.
