Interbank interest rates cool down thanks to good liquidity

The liquidity of the banking system has risen recently, helping cool interbank interest rates.

Interbank interest rates cool down thanks to good liquidity hinh anh 1

Illustrative photo (Source: cafef.vn)


The liquidity of the banking system has risen recently, helping cool interbank interest rates.

According to the State Bank of Vietnam (SBV), the average overnight interest rate in the trading session ending last week was only 0.92 percent per year, against 1.21 percent in May. The rate for one-week loans was 1.16 percent, compared with 1.35 percent in May.

The good liquidity was thanks to a large amount of money the SBV pumped into the market through the purchase of US dollars from commercial banks.

In a recent money market report, Saigon Securities Incorporation (SSI) reported about 75 percent of foreign currency sales contracts have expired to date this year and the remaining contracts will expire in August. Accordingly, the SBV will have to pump about 157 trillion VND into the market to buy foreign currency.

According to SSI's estimates, commercial banks sold a foreign currency amount of nearly 7 billion USD with a 6-month term to the SBV at the beginning of this year.

A recent report of Vietcombank Securities Company (VCBS) also stated that the liquidity of the banking system in this period is expected to be more abundant than in the previous quarter when the SBV purchases the dollars following the expiry date of foreign currency contracts.

According to VCBS, the bright spot at this time continues to come from the fact that capital flows choose Vietnam as an investment destination with the registered and disbursed FDI capital still on an increasing trend.

The Government’s target of stabilising inflation is being met, and there is still room for controlling inflation.

These factors would help increase interbank liquidity, thereby bringing interest rates down again in August, VCBS said.

While the liquidity of the banking system is abundant, lending is showing signs of slowing down due to the impact of the COVID-19 pandemic, with many cities and provinces having to implement social distancing measures.

According to a report of the SBV’s HCM City branch, credit last month only increased by about 0.56 percent compared to the previous month. The average credit increase in the previous months was more than 1 percent. The city's total outstanding loans at the end of July was estimated at 2.69 quadrillion VND, up 6.2 percent compared to the end of 2020.

The deposit growth at the city’s banks in the period also showed signs of slowing. The total mobilised capital of banks in the city at the end of July was estimated at more than 3.02 quadrillion VND, up only 0.5 percent compared to the previous month and 4 percent compared to the end of 2020.

As the latest outbreak of COVID-19 is causing many difficulties for production and business, SSI believes the SBV would continue to maintain the current monetary policy in the direction of supporting growth and firms.

“The monetary policy might be continually loosened if the pandemic becomes more complicated and lasts longer than expected,” SSI noted./.

Source: VNA
en.vietnamplus.vn

Related News

The biggest challenges businesses are facing

The biggest challenges businesses are facing

VCN - Orders, cash flow, market information, loan approach... are still the difficulties when the Private Sector Development Research Board (abbreviated as IV Board) surveyed the business situation.
Determine tools, policy for inflation control

Determine tools, policy for inflation control

VCN - According to economic expert Associate Professor, PhD. Ngo Tri Long (photo), former Director of the Price Market Research Institute (Ministry of Finance), inflation is an issue that needs special attention, especially related to the management of monetary policy, interest rates, increasing prices of goods and services...
How to stabilize the gold market?

How to stabilize the gold market?

VCN - Is the gold auction solution effective enough to stabilize the market, while many other factors need to be taken into account such as transparency, preventing price manipulation... In addition, it is also necessary to think about other monetary solutions including raising interest rates because a higher interest rate environment will cool both gold and exchange rates.
The exchange rate will gradually cool down from the end of the second quarter of 2024, while interest rates will remain low

The exchange rate will gradually cool down from the end of the second quarter of 2024, while interest rates will remain low

VCN - According to forecasts, Vietnam's financial sector in 2024 will be more positive, with the exchange rate gradually cooling down from the end of the second quarter of 2024, while interest rates will remain low to promote growth.

Latest News

Amending regulations for proactive, responsible tax officials

Amending regulations for proactive, responsible tax officials

VCN - Dr. Phan Hoai Nam, CEO of W&A Consulting, Member of the Association of Chartered Certified Accountants (ACCA), CPA Australia, and the Chartered Institute of Taxation (CIOT), discusses tax refund issues with Customs Magazine.
Drastic actions taken to complete 95% public investment disbursement goal: Gov’t press conference

Drastic actions taken to complete 95% public investment disbursement goal: Gov’t press conference

The Ministry of Planning and Investment is working with other ministries, sectors and localities to take drastic measures to complete this year's target of disbursing 95% of allocated public investment, its Deputy Minister Tran Quoc Phuong told the Government’s regular press conference on November 9.
Revising policies to adapt to two-way impact of FTAs

Revising policies to adapt to two-way impact of FTAs

VCN - One of the most obvious positive impacts of Free Trade Agreements (FTAs) is to promote export growth, thereby contributing to increasing state budget revenue. However, the implementation of FTAs ​​also has a negative impact on state budget revenue under commitments on tariff reduction and elimination.
Deputy Prime Minister, Minister of Finance: Budget management to be more decentralized

Deputy Prime Minister, Minister of Finance: Budget management to be more decentralized

VCN - Deputy Prime Minister, Minister of Finance Ho Duc Phoc indicated that the revision of the State Budget Law (SBL), as part of the "One Law Amending Seven Laws" scheme, focuses on removing short-term bottlenecks and obstacles. He also announced that future amendments will increase decentralization and delegation of authority in budget management.

More News

Amend regulations on “Public-Private Partnership” (PPP) and “Build Transfer” (BT)  investment: Fully calculating to avoid loss of state assets

Amend regulations on “Public-Private Partnership” (PPP) and “Build Transfer” (BT) investment: Fully calculating to avoid loss of state assets

VCN - In the project "1 law amending 4 laws" related to investment, on investment under the public-private partnership (PPP) method, the majority of National Assembly deputies agreed with the Government's proposal to allow an increase in the state capital ratio for some specific cases.
Public investment disbursement reaches 52.2% in ten months

Public investment disbursement reaches 52.2% in ten months

Public investment disbursement was estimated at 355.61 trillion VND (14 billion USD) in the first 10 months of this year, fulfilling 52.2% of the annual target, according to the Ministry of Finance (MoF).
State budget revenue for 2024 nears target

State budget revenue for 2024 nears target

VCN - Data from the Ministry of Finance reveals that by the end of October 2024, state revenue is on the brink of reaching the annual target. Cumulative budget revenue for the first 10 months of 2024 is estimated at VND 1,654.2 trillion, amounting to 97.2% of the current appropriation, an impressive 17.3% surge compared to the same period in 2023.
Public investment spending up 1.8% in first 10 months of 2024

Public investment spending up 1.8% in first 10 months of 2024

VCN - Public investment from Vietnam’s state budget saw steady growth in the first ten months of 2024, reaching 64.3% of the annual target—an increase of 1.8% compared to the same period last year.
Propose many solutions to shorten tax refund time

Propose many solutions to shorten tax refund time

VCN - Fully defining the duties and responsibilities of tax officials and having a mechanism to protect tax officials in tax refunds are breakthrough solutions being proposed to remove bottlenecks and barriers, speeding up the tax refund process in the coming time.
Finance sector exceeds revenue target in 4 years thanks to comprehensive reform of collection method

Finance sector exceeds revenue target in 4 years thanks to comprehensive reform of collection method

VCN – The revenue collection method of the Customs and Tax sectors has been comprehensively reformed, contributing to exceeding the revenue target of about VND1 quadrillion over the past four years, Deputy Prime Minister and Minister of Finance Ho Duc Phoc said.
3 priority pillars of Japanese ODA capital flow in Vietnam

3 priority pillars of Japanese ODA capital flow in Vietnam

VCN - Mr. Sugano Yuichi, Chief Representative of the Vietnam Office of the Japan International Cooperation Agency (JICA), shared about the outstanding results in more than 30 years of implementing ODA projects in Vietnam and plans for the coming time.
Removing legal hurdles in regular spending for capital assets

Removing legal hurdles in regular spending for capital assets

VCN - Mr. Bui Anh Binh, Deputy Director of the Department of Public Administration (Ministry of Finance) emphasized that the issuance of Decree No. 138/2024/ND-CP has created an important legal corridor, promptly removed obstacles, and created conditions for ministries, branches, and localities to proactively use regular expenditures to carry out tasks and projects outside the approved medium-term public investment plan, and to be proactive in performing assigned tasks.
M&A activities show signs of recovery

M&A activities show signs of recovery

Mergers and acquisitions (M&A) activities in Vietnam have been showing signs of recovery in recent months as several large companies announced finished deals, which may create a ripple effect in the M&A market.
Read More

Your care

Latest Most read
Amending regulations for proactive, responsible tax officials

Amending regulations for proactive, responsible tax officials

Dr. Phan Hoai Nam, CEO of W&A Consulting, discusses tax refund issues with Customs Magazine.
Drastic actions taken to complete 95% public investment disbursement goal: Gov’t press conference

Drastic actions taken to complete 95% public investment disbursement goal: Gov’t press conference

The Ministry of Planning and Investment is working with other ministries, sectors and localities to take drastic measures to complete this year's target of disbursing 95% of allocated public investment, its Deputy Minister Tran Quoc Phuong told the Government’s regular press conference on November 9.
Revising policies to adapt to two-way impact of FTAs

Revising policies to adapt to two-way impact of FTAs

VCN - One of the most obvious positive impacts of Free Trade Agreements (FTAs) is to promote export growth, thereby contributing to increasing state budget revenue. However, the implementation of FTAs ​​also has a negative impact on state budget revenue u
Deputy Prime Minister, Minister of Finance: Budget management to be more decentralized

Deputy Prime Minister, Minister of Finance: Budget management to be more decentralized

Deputy Prime Minister, Minister of Finance Ho Duc Phoc indicated that the revision of the State Budget Law (SBL) focuses on removing short-term bottlenecks and obstacles.
Amend regulations on “Public-Private Partnership” (PPP) and “Build Transfer” (BT)  investment: Fully calculating to avoid loss of state assets

Amend regulations on “Public-Private Partnership” (PPP) and “Build Transfer” (BT) investment: Fully calculating to avoid loss of state assets

In the project "1 law amending 4 laws" related to investment, the majority of National Assembly deputies agreed with the Government's proposal to allow an increase in the state capital ratio for some specific cases.
Mobile Version