Overnight interest rate doubles to 4.42%
Overnight interest rate doubles to 4.42%
Interest rates on the inter-bank market have surged strongly in the past week despite the central bank’s net injection of VND14.4 trillion (US$612.76 million).
According to a report from the Saigon Securities Incorporation (SSI), the rate of overnight loans last week doubled from the previous week to reach 4.42 per cent, nearly equal to the 4.75 per cent rate in the open market operation (OMO). The rise has also contributed to reducing the interest rate gap between overnight and three-month loans to only 27 basis points.
Interest rates for one-week and two-week loans also surged 1.9 and 1.7 times against the previous week.
SSI analysts attributed the interest rate hike to a net withdrawal of VND60 trillion for the week ending August 3, which has reduced the liquidity in the banking system.
SSI’s report also showed that the yield of the central bank’s five-year bills has kept steady at 4.3 per cent in the past week.
During the week, the transaction volume of the bills increased by 27 per cent against the previous week. Foreign investors net bought VND113 billion after they net sold in the last five weeks.
