SSI: the sharp increase in interbank rates only temporary

06-May-2021 Intellasia | Vietnam Finance | 5:02 AM Print This Post

Last week, the Open Market Operation (OMO) continued to have no transactions; the interbank interest rates rose by 0.41 — 0.48 basis points, closing the week at 0.837 percent per annum on overnight term and 1.084 percent per annum on one-week term. Meanwhile, the savings and lending interest rate levels remained unchanged in the last week of April

According to the latest capital market report of Saigon Securities Incorporation (SSI), the strong increase in interbank interest rates in the week is only temporary, due to the increase in liquidity of commercial banks during the holiday from April 30th to May 4th.

“The interest rate level will be stable at a low level in the second quarter of 2021 as commercial banks’ liquidity is still quite abundant. In the context of the current complicated epidemic, the demand for credit may be affected and the State Bank of Vietnam (SBV) will firmly aim to keep interest rates low to support businesses and the economy,” said SSI’s expert.

Previously, there were some concerns in the market about the strong increase of interbank interest rates, saying that this was a signal that interest rates would go into an uptrend in the context of the gradually increasing credit demand and inflation is also under considerable pressure of increase.

In the foreign exchange market, the interest rate gap between dong and US dollar on the interbank channel caused the listed US dollar/dong of commercial banks to fall by 15 dong per US dollars, reaching 22,930/ 23,140 dong per US dollar. The free exchange rate also sharply fell by 105 dong per US dollar on buying rate and 85 dong per US dollar on selling rate, reaching 23,635/ 23,685 dong per US dollar.

According to SSI, the domestic foreign currency demand and supply will still be favourable and the US dollar/dong exchange rate will remain stable.

Estimates of the general Statistical Office showed that in the first four months of 2021, Vietnam had a trade surplus of 1.29 billion US dollars, in which domestic economic sector recorded a trade surplus of 9.92 billion US dollars and foreign invested sector (including crude oil) saw a trade surplus of 11.21 billion US dollars.

 

Category: Finance, Vietnam

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