Central bank injected more than VNĐ5 trillion to the market

Central bank injected more than VNĐ5 trillion to the market

The high USD and VNĐ interest rate gap is putting more pressure on the USD/VNĐ exchange rate.

Headquarters of the State Bank of Vietnam (SBV). Interest rate on SBV's bills was down to 3.1 per cent last week, down from 3.2 per cent for the previous week. Photo sbv.gov.vn

After many consecutive sessions of net withdrawal, the State Bank of Vietnam (SBV) last week net injected more than VNĐ5.09 trillion (US$199.7 million) through the open market operation (OMO) and bill issue channels to support liquidity in the banking system.

Specifically, on the OMO channel, the SBV lent commercial banks a total of nearly VNĐ35.62 trillion with an interest rate of 4 per cent. Last week saw a maturity amount of more than VNĐ33.5 trillion on the channel, so the SBV’s total net injection via this was VNĐ2.09 trillion.

On the bill channel, the SBV issued VNĐ2 trillion of bills last week. As nearly VNĐ5 trillion of bills matured last week, the SBV’s net injection through this channel was about VNĐ3 trillion.

According to data of the financial data provider Wigroup, the interest rate on bills was lower, down to 3.1 per cent last week from 3.2 per cent the previous week. The interest rate on bills decreased by a total of 1.9 percentage points in the past two weeks, from 4.0 per cent to 3.1 per cent per year.

In the interbank market, overnight interest rates tended to decrease last week, except for the session on March 4. Accordingly, overnight interbank interest rates increased to 4.74 per cent per year on March 3, but then decreased to 3.98 per cent per year on March 6, a significant decrease compared to the peak of 6.09 per cent per year recorded on November 4, 2024.

Interbank interest rates for terms from one week to three months are currently fluctuating from 4.02-5.02 per cent per annum.

Deposit interest rates listed at commercial banks have also reduced by 0.1-0.9 percentage points depending on terms in the past two weeks. The rates for several key terms have dropped below 6 per cent.

According to data from the US Federal Reserve (Fed)’s New York branch, the gap between the US secured overnight financing rate (SOFR) and the Việt Nam’s overnight interest rate on March 6 was 0.37 per cent. The high USD and VNĐ interest rate gap is putting more pressure on the USD/VNĐ exchange rate.

In a currency market report released recently, the MB Securities Company (MBS) said that the USD/VNĐ exchange rate fluctuated strongly throughout last month, as the US dollar index (DXY) in the global market remained at a high level while domestic demand for the dollar increased due to enterprises’ rising imports of production materials and the State Treasure’s large dollar purchase.

MBS’s analysts forecast that in the first quarter of 2025, the USD/VNĐ exchange rate would fluctuate between VNĐ25,500 - 25,800 per dollar as the DXY was predicted to further strengthen in 2025 due to trade tensions.

However, there were still positive factors supporting the đồng, such as a positive trade surplus of about $1.47 billion, a strong FDI disbursement of $2.95 billion and a marked recovery of the tourism industry.         

Bizhub