On July 25, the overnight interest rate on the interbank market dipped to 2.5 percent per annum (p.a.), lower 5 percent than one month ago, according to the local newswire VnEconomy.
According to the Reuters’ data, on the interbank market, the interest rates have continuously fallen recently. On July 25, the overnight interest rate was offered at 2.5 percent p.a., down another 0.5-1 percent from July 24. Meanwhile, the interest rate for 1-week term slipped to 3 percent p.a. and one month at 6 percent p.a., down 1 percent and 0.5 percent from a day earlier.
According to the updated statistics from the State Bank of Vietnam (SBV), till July 23, the overnight interest rate tended to fall in recent days and stood at 5.26 percent per year. Daily transaction volume reached about 20-25 trillion dong.
Reportedly, one month ago, the interbank overnight interest rate was at 7.5 percent p.a., one week at 8-8.5 percent p.a. and one month at 9-9.5 percent p.a.
On open market operations (OMO), transaction activities were less vibrant when liquidity of commercial banks has been much improved and they did not have to ask for the central bank’s loan through repo operation.
The statistics showed that, in last week, the transaction volume on OMO reached only 19 billion dong at the interest rate of 8 percent p.a.
Falling interest rate movements showed that the liquidity of the banking system was generally stable and this is also favourable conditions for the process of gradually lowering the interest rates.
Reportedly, in a report issued on July 24, right after announcing the consumer price index (CPI) in July with a fall of 0.29 percent from June 2012, JPMorgan Chase Bank forecasted the interest rate will likely fall further to at least 200 percentage points in the last six months of this year.