System liquidity continues to be abundant

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

The Analysis team of Saigon Securities Incorporation (SSI Research) has released a weekly bond and capital market report for the week of September 27th to October 1st 2021.

During the past week, the Open Market Operations(OMO) did not generate new transactions. The interbank interest rates mostly moved sideways, closing the week at 0.71 percent (up by one basis point) on overnight term and 0.84%(up by four basis points) on one-week term. In this week, a large amount of dong will be injected into the market through the maturity of foreign currency forward contracts. If the OMO continues to have no transaction like the previous week, the liquidity in the system will remain abundant.

According to the State Bank of Vietnam (SBV), as of September 20th 2021, the credit to the whole economy and capital mobilisation from credit institutions respectively grew by 7.17 percent and 4.28 percent compared to the end of 2020 (compared to 4.99 percent and 7.35 percent recorded in 2020). However, the credit slowed down in September with a decrease of 0.23 percent against August, equivalent to about 30 trillion dong in the context of the complicated epidemic developments. Thus, the difference between mobilisation and lending has been improved and helped reduce pressure on the system liquidity.

SSI said that the monetary policy easing is expected to continue in the near future to support the recovery of the economy after the pandemic, in the context that inflation is being well controlled, including the increase in credit growth limits, more measures to lower lending interest rates, or even a cut in operating interest rates, etc.

In Vietnam, in contrast to the developments in international market, the US dollar/dong exchange rate listed in commercial banks slightly declined by 10 dong on both buying and selling rates, closing the week at 22,630 22,860 dong per US dollar. The strong fluctuations of the world gold price in the past week (decreased by up to 1.4 percent compared to the end of the previous week in the Wednesday session and increased by 0.6 percent in the end of the week), making the difference between the domestic and international gold prices to approach 10 million dong per tael and the exchange rate on the free market to fluctuate strongly. Closing the week, the free exchange rate rose by 95 dong per US dollar on buying rate and declined by five dong per US dollar on selling rate. The domestic gold price fluctuated in a narrow range of 56 57 million dong per tael.

SSI believed that the supply and demand of foreign currencies in the near future will be relatively balanced and help the exchange rate maintain a stable state. The estimated trade balance data in September released by the General Statistical Office was relatively positive with a trade surplus of 500 million US dollars. Although we need to observe more official data from the general Department of Customs, the fact that the government is gradually reopening the economy and focusing on restoring production is expected to improve the trade balance at the end of the year and also help the FDI disbursement have more positive developments.

 

Category: Finance, Vietnam

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