SSI: lending rates to decrease in the short term, savings rates

25-Aug-2021 Intellasia | Doanh nghiep va Tiep thi | 5:02 AM Print This Post

The analysis team of Saigon Securities Incorporation (SSI Research) has released the capital market report for the week of August 16th 20th.

During the week, the Open Market Operation (OMO) did not record any new transaction and foreign currency forward contracts continued to be executed, helping improve the supply of dong. The interbank interest rates in the week slightly declined by 0.03 0.05 percentage point, closing the week at 0.84 percent per annum on overnight term and 1.01 percent per annum on one-week term.

For the difficulties of businesses and people due to the pandemic, the State Bank of Vietnam (SBV) has issued official document on reducing lending interest rates and providing free banking services. Accordingly, the agency will strengthen the supervision of the implementation of commitments to lower lending interest rates in a substantive manner.

On that basis, the SBV will consider and adopt policy to encourage or restrict certain contents of banks’ credit activities in 2022.

In the week, Commercial Joint Stock Bank for Foreign Trade of Vietnam (Vietcombank) and Commercial Joint Stock Bank for Investment and Development of Vietnam (BIDV) announced an additional interest rate support package worth one trillion dong (each bank) for 19 provinces in the South with an interest rate reduction of 0.3 1.5 percent per annum.

SSI Research expected that the lending interest rates will slightly decline in the short term, while savings interest rates will see not much fluctuation.

In the foreign exchange market, the US dollar/dong exchange rate continued the downtrend in both markets. Specifically, the rate listed by commercial banks fell by 15 dong per US dollar in both buying and selling rates, reaching 22,685 22,915 dong per US dollar. The free exchange rate experienced fairly strong adjustments with 75 dong per US dollar decline in buying rate and 65 dong per US dollar decline in selling rate, being traded at 23,0505 23,170 dong per US dollar.

The trade balance recorded a deficit of 1.36 billion US dollars in the first half of August 2021, accumulating trade deficit of 3.88 billion US dollars. Since it was offset by the Foreign Direct Investment (FDI) and remittance flows, the overall trade balance remained relatively balanced.

In the coming time, SSI Research assessed that the ability to control the disease is the important signal for the attraction of FDI. In general, the dong is still expected to have good developments in the region, in the context when the US dollar is said to appreciate towards the end of the year.

 

Category: Finance, Vietnam

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