SSI Research: Interest rates to remain low

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

The research centre of Saigon Securities Incorporation (SSI Research) has published a capital market report for the week of October 5th to 11th. There was still no new transaction on the Open Market Operations (OMO), the interbank interest rates are moving sideways to 0.175 percent per annum for overnight term and 0.225 percent per annum for one-week term.

The deposit interest rates dropped by 20 40 basis points in large commercial banks, popularly reaching three to 3.8 percent per annum for terms of less than six months, 3.7 five percent per annum for terms from six to below points, and 4.9 5.6 per annum for terms of 12 and 13 months.

Although the pandemic is controlled and the market has entered a peak season in the last quarter of the year, the demand for loans is still weak and is much lower (about two percent) than mobilisation growth the dong is still abundant in the system and credit institutions, interest rates still level off at a low zone in the near future.

The US dollar fluctuated fairly strongly in the last week after the conflicting statements of the US President to the fiscal stimulus package. The White House proposed a package of 1,800 billion US dollar on October 9th, then announced to stop negotiations on the 2,200 billion US dollar support package four days before the market sentiment also quickly turned to optimism when capital flew strongly from the US dollar and Japanese yen to other assets, making the prices of stock, bonds, commodities and even gold to increase fairly sharply on Friday.

Closing the week, the DXY index fell to 93, most currencies gained against the US dollar, such as euro (0.94%), British Pound (0.78%), Korean Won (1.97%), Sweden Krona (1.72%), Swiss Franc (1.08%), etc. Gold increased by 1.61 percent to 1,930 US dollar per ounce, the highest level in the last three weeks.

The US dollar/dong exchange rate listed at commercial banks remained unchanged at 23,070/ 23,280 dong per US dollar. The exchange rate on the free market declined by 10 dong per US dollar to 23,200/ 23,230 dong per US dollar. The central reference exchange rate fell by 10 dong per US dollar to 23,203 dong per US dollar. In the short term, the US dollar/dong exchange rate will remain stable thanks to the depreciation of the US dollar in the international markets and favourable foreign currency demand and supply.

Some risks that need to watch out for, including the US administration’s investigation of Vietnam’s foreign exchange policy, accusing Vietnam of undervaluing the local currency in 2019; and the approaching US presidential election.

 

Category: Finance, Vietnam

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