Liquidity pressure reduced

17-Jan-2019 Intellasia | Tri Thuc Tre | 6:00 AM Print This Post

Last week, the State Bank of Vietnam (SBV) net withdrew more than 4.8 trillion dong via Open Market Operation (OMO), interest rates on the interbank market also cooled down.

SSI Retail Research of Saigon Securities Incorporation (SSI) has just released the money market report in the week to 11th January 2019.

Accordingly, in the week, SBV net withdrew 4.803 trillion dong via OMO, in which the amount pumped out was 47.853 trillion dong, and 52.656 trillion dong was absorbed with the interest rate of term deposits unchanged at 4.75 percent per annum (p.a.). Treasury bills (T-bills) continued to have no transaction and the outstanding credit balance is currently maintained at zero.

Interbank interest rates continued to decline in the week, from 4.8 percent to 4.63 percent p.a. for overnight, and for one-week, two-week, one-month and three-month tenors, rates also decreased from 12-14 basis points. The reason is that the liquidity of State-owned commercial banks was more stable, and SBV also bought foreign currency for foreign exchange reserves, increasing the liquidity of dong. Liquidity pressure was relieved; interest rates on the interbank market this week will be stable and may decrease slightly.

Deposit rates in the Tier-1 market were maintained at the level established from end of 2018.

During the week, four State-owned commercial banks simultaneously lowered lending rates by 0.5 percent in five priority sectors: export, rural agriculture, small and medium enterprises (SMEs), supporting industries and high-tech enterprises from 10th January 2019. Regarding this action, the analysis team commented that the expectation of a wave of lowering lending interest rates in other commercial banks after this move is not high, at least in the period from now to the Lunar New Year since the deposit rate is still hard to reduce.


Category: Finance, Vietnam

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