Banks in surplus of capital
Foreign Exchange Department of Vietnam Commercial Joint Stock Bank for Industry and Trade (VietinBank-CTG) has recently issued a report “Evolutions and trends of monetary market in April 2012″ with notable information.
The source said that in last month, the State Bank of Vietnam (SBV) continued to withdraw capital via repo operation and Treasury bill channel.
Particularly, according to the central bank’s data and as calculated, in April, the central bank pumped 9.055 trillion dong for 7-day term on open market operation (OMO) at the interest rate of 12-13 percent per annum (p.a.) and withdrew 10.962 trillion dong.
At the same time, the central bank issued T-bills to draw out 51.431 trillion dong (for tenors of 28-days, 91-days and 182-days) at the yield of 6.2-12.5 percent p.a.
“Notably, by late April, the yield of T-bills continued to fall daily. The constant falls of interbank interest rates have led to the decline of T-bill yield. However, commercial banks in excess of too much money is not a good sign” VietinBank’s report stated.
Totally in April, the total amount of money withdrawn by the central bank via repo operation and T-bills reached 53.338 trillion dong.
Interbank transactions also showed that the capital sources of banks have recently also been quite favourable and the interest rates have fallen constantly and remained low.
In particular, in the last week of April, the central bank’s data showed that the interbank average interest rate in dong decreased in all terms whereby 1-week, 2-weeks, 1-month, 6-months and more than 12-months saw a fall of 1 percent-1.49 percent, overnight term and 3-months down 0.88 percent and 0.81 percent and 3-weeks and 2-months slipped slightly. 12-month term saw a strong decline over the previous week by 5.22 percent.
The overnight average interest rate thereby stood at only 6.69 percent p.a. and the average interest rate for 1 and 2-week terms even dropped to 5.79 percent p.a. and 5.93 percent p.a. and longer terms were popularly at 10 percent p.a. and the highest was 12.04 percent p.a. for 6-month term.
In early May, the interbank average interest rate in dong continued to keep downward tendency and remained low. The latest updated level by the central bank showed that overnight term was at only 6.39 percent p.a., one week at 4.83 percent p.a. and two weeks at 5.49 percent p.a.
Some sources also mentioned the interest rate at below 5 percent p.a. in recent days.
According to the local newswire VnEconomy, though the representative of these interest rates is only relative, it contributed to showing the fact that the amount of serviceable capital of banks is plentiful.
Category: Finance
