According to the bulletin of VPBank Securities Company (VPBS) updated yesterday afternoon (March 5), the State Bank of Vietnam (SBV) net withdrew as much as 50.5 trillion dong on the open market operation (OMO).
The withdrawal tool was mainly through the issuance of Treasury bills (T-bills) with frequency and scale maintaining high since the Lunar New Year (Tet) holiday.
Specifically, after Tet, the State Bank continuously issued T-bills with the auction scale of 20 trillion dong in many sessions. The term from 14 days was also extended to 28 days, with the respective interest rates of 0.6 percent/annum and 0.9 percent/annum
According to aggregated data from a member in the interbank market, yesterday (March 5), the State Bank continued to offer for bid 10 trillion dong T-bills with 28-day term. Credit organisations absorbed eight trillion dong with the interest rate remaining unchanged at 0.9 percent.
Accordingly, with the amount of T-bills in circulation, corresponding to the money withdrawal scale through this channel, increased to 92.1 trillion dong an unprecedented scale over the last many years.
The aforementioned frequency and scale of withdrawing money took place after SBV continuously net purchased a large amount of foreign currency at the end of 2017 and beginning of 2018. T-bills still remained the major tool in this profession, which was short-term and associated with interest rate costs after withdrawing.
In spite of urgently withdrawing money as aforementioned, the interest rate in dong in the interbank market has continuously decreased strongly and fast, the dong-US dollar interest rate swap has accordingly returned to negative status, after being positive before Tet. The US dollar price on the interbank market has also continuously increased over recent sessions.
Specifically, as of March 5, the average interbank interest rates in dong continued to decrease 0.02-0.05 percentage points in almost all terms compared to the session at the end of last week, while the 2-week term slightly increased by 0.01 percent.
On this market, the interest rate in dong for overnight term fell deeply to 1.16 percent/annum from more than four percent before Tet. The one-week term remained at 1.34 percent, compared with 1.66 percent for two-week term and 2.40 percent for one-month term. Meanwhile, the average US dollar interest rate was significantly higher with 1.58 percent for overnight term; 1.73 percent for one-week term, 1.87 percent for two-week term and 2.07 percent for one-month term.
The negative dong-US dollar interest rate swap was one of the factors affecting US dollar/dong exchange rate. On the interbank market, the US dollar price has continuously increased over the last sessions, traded at 22,769 dong on March 5, much higher than 22,700 dong that SBV has bought since before the Lunar New Year.
