The State Bank of Vietnam (SBV) issued Treasury bill to withdraw 5.139 trillion dong on March 15-16 to ensure the liquidity of the banking system through the open market operations (OMO), according to the local online news provider NDHMoney.com, citing Reuters’ data.
Particularly, under the Repo operation on OMO, in last week, the central bank pumped 6.551 trillion dong at the interest rate of 13-14 percent per annum (p.a.) (the interest rate on OMO has decreased to 13 percent p.a. from previous 14 percent p.a. since March 13), for 7-and 14 day terms, according to Reuters’ data.
At the same time, the central bank withdrew 10.216 trillion dong, leading to a net withdrawal of 3.665 trillion dong on OMO last week.
The focus on OMO last week was the central bank’s moves to continuously issue Treasury bills on March 15 and 16 to withdrawal capital on OMO.
Accordingly, the central bank issued 1.843 trillion dong worth of 28-day tenor T-bill at the interest rate of 11.5 percent p.a., 1.456 trillion dong for 91-day tenor T-bill at the interest rate of 12 percent p.a. and 1.74 trillion dong for 182-day tenor T-bill at 12.5 percent p.a.
In addition, on March 12, the central bank also issued 364-day tenor bill of exchange at the interest rate of 11.4 percent p.a. to withdraw 100 billion dong on OMO.
The total capital withdrawal via T-bill issuances reached 5.139 trillion dong.
Thus, the total net capital withdrawal via OMO, including Repo and T-bill issuances reached nearly nine trillion dong.
According to the SBV’s Central Banking Department, currently, the available capital of local commercial banks is quite ample, so the central bank’s T-bill issuance is to regulate the capital flows.
This T-bill issuance is also under the central bank’s scheme that the governor announced earlier and within the roadmap to reduce the lending interest rate.