Exchange rate and interest rate remain stable according to SSI Research

29-Oct-2020 Intellasia | NDH | 6:02 AM Print This Post

SSI Securities Corporation’s Analysis centre (SSI Research) had released the monetary market report for the week from October 19 to October 23. There were no new transactions in the open market; the interbank interest rate was flat at 0.17 percent per year for the overnight term and 0.23 percent per year for the one-week term. Deposit interest rates were also stable at three percent to 3.8 percent per year for less than six months, 3.7 percent to five percent per year for terms of six months to less than 12 months, 4.9 percent to 5.8 percent per year with a term of 12 months to 13 months.

As of September 14, commercial banks had rescheduled the repayment period for 321 trillion dong (3.7 percent of total outstanding loans), exempted, reduced interest rates for 1.18 quadrillion dong (13.7 percent of total outstanding loans) which were existing outstanding loans affected by the Covid-19 epidemic. Recently, the State Bank of Vietnam (SBV) had requested commercial banks to take measures to support customers damaged by floods in the Central and Central Highlands regions.

In the coming months, SSI Research believed that interest rates would remain low because the ability to absorb capital of the economy was still relatively modest. SBV still emphasized reducing interest rates to help commercial banks have enough resources to support the economy.

The USD/VND exchange rate fell sharply in the unofficial market

Last week, the United States’ (US)’s expectation through the new economic stimulus package had risen, making the general market sentiment quite positive. Also, the United Kingdom (UK) agreed to resume Brexit negotiations with the European Union (EU) after the previous suspension announcement by prime minister Boris Johnson, which had supported the British Pound (GBP) and the euro ( euro ) appreciation of 0.97 percent and 1.21 percent against the US dollar (USD), respectively.

The DXY index dropped from 93.7 to 92.8. Most currencies gained against USD, including the Japanese Yen (JPY) (0.65%), the Chinese Yuan (CNY) (0.16%). This week, in addition to the epidemic, the new US fiscal package negotiation would still be the dominant focus of the global monetary market.

The USD/VND exchange rate listed by commercial banks remained at 23,060 dong/23,270 dong but decreased by 45 basis points in the free market to 23,170 dong/23,200 dong. centre rate decreased by 16 VND/USD to 23,185 VND/USD. Since the beginning of the year, the dong had kept its value against the US dollar but had devalued by 3.7 percent against JPY, 4.1 percent against CNY and 2.4 percent against KWR. SSI Research believed that the exchange rate would remain stable in the short term due to favourable domestic supply/demand for foreign currencies and not many sudden changes in international developments.

 


Category: Finance, Vietnam

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