Data from Bao Viet Securities Joint Stock Co (BVSC) showed that in week from June 4 to 8, the State Bank of Vietnam (SBV) posted a net withdrawal of 710 billion dong on open market operations (OMO) after two straight weeks of net injections.
Of which, the total capital injection in week reached 832 billion dong and the total amount of money falling due was 1.545 trillion dong. The money injection per session still remained low, averaging at about 416 billion dong per session.
Of note, the central bank only organised two OMO trading sessions on June 6 and 7 to pump 832 billion dong and withdrew 1.545 trillion dong during the period.
Together with net withdrawal, the interest rate on the interbank market rose slightly in short terms.
According to BVSC, the reason was attributable to the increasing demand for short term funds of several commercial banks to ensure the regulations on capital adequacy ratio (CAR). generally, the liquidity of the entire banking system was quite abundant.
The central bank’s data showed that on June 7, the interbank average interest rate for overnight term stayed at 3.67 percent per annum (p.a.), rising 0.76 percent from previous week, one week at 2.34 percent p.a., one month at 4.5 percent p.a. and the highest level was for 6-month term at 9.72 percent p.a.
At the speech at the National Assembly meeting on June 7, the central bank’s governor Nguyen Van Binh said that year to date; the central bank has bought in $9 billion and pumped about 180 trillion dong, contributing to improving the liquidity of the whole banking system significantly.
In related news, the central bank decided to trim down the dong deposit rate cap to 9 percent p.a. on easing inflationary pressure and pull down OMO rate by 1 percent to 10 percent p.a. from June 11.