The State Bank of Vietnam (SBV)'s total amount of capital being pumped into open market operations (OMO) continuously fell during recent tenders.
In February, due to hardships on liquidity of banking system, SBV pumped 12-15 trillion dong each day to support OMO. OMO was enhanced with two tenders per day.
On March 3, the tender result reached 10.005 trillion dong for two sessions.
However, since March 4 till date, the total amount of capital pouring into OMO declined strongly to 3.2 trillion dong on March 4, 2.983 trillion dong on March 10, and it reached only 796 billion dong, 454 billion dong and 742 billion dong on March 11, 12 and 15 respectively.
The coupon rate was stable at 8 percent per annum, equalling to the current refinancing interest rate, mainly in 14 day term.
Statistic showed that since after Tet holiday, the liquidity of banking system has been improved. At present, banks are in surplus of some 30 trillion dong of spare capital.
Open market operations (OMO) are the means of implementing monetary policy by which the central bank controls its national money supply by buying and selling government securities, or other financial instruments (treasury bonds, treasury bills, treasury notes). Monetary targets, such as interest rates or exchange rates, are used to guide this implementation.
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