Economic news review March 12

The central exchange rate decreased by 17 VND, the VN-Index increased by 9.51 points, and UOB Bank just forecasted Vietnam's GDP growth in the first quarter of 2024 at 5.5%... are some notable economic news on March 12.

Review of economic information week 4-8/3 Review of economic information on March 11

Economic information review

Domestic news

In the foreign exchange market session on March 12, the State Bank listed the central exchange rate at 23,955 VND/USD, a sharp decrease of 17 VND compared to the first session of the week.

The USD buying price was kept unchanged at 23,400 VND/USD by the State Bank of Vietnam, while the USD selling price was listed at 25,102 VND/USD, 50 VND lower than the ceiling exchange rate.

On the interbank market, the dollar-dong exchange rate closed at 24,648 VND/USD, down slightly by 2 VND compared to the session on March 11.

The dollar-dong exchange rate on the free market decreased by 20 VND for buying and 100 VND for selling, trading at 25,480 VND/USD and 25,600 VND/USD.

On March 12, the average interbank VND interest rate increased sharply by 0.12 - 0.70 percentage points in all terms of 1 month or less compared to the first session of the week, specifically: overnight 1.50%; 1 week 1.68%; 2 weeks 1.80% and 1 month 2.18%.

The average interbank USD offering rate increased by 0.01 - 0.02 percentage points for overnight and 2-week terms while remaining unchanged for 1-week and 1-month terms, trading at: overnight 5.21%; 1-week 5.29%; 2-week 5.38%, 1-month 5.40%.

Government bond yields in the secondary market increased across all terms, closing at: 3-year 1.38%; 5-year 1.60%; 7-year 1.99%; 10-year 2.50%; 15-year 2.70%.

Yesterday, in the open market operation, on the mortgage channel, the State Bank of Vietnam offered VND3,000 billion for a 7-day term, the interest rate remained at 4.0%. There was no winning volume, no circulating volume on this channel. The State Bank of Vietnam offered SBV bills for a 28-day term, bidding on interest rates. There were VND14,999.7 billion of winning bills with an interest rate of 1.4%.

Thus, the State Bank of Vietnam (SBV) withdrew a net VND14,999.7 billion from the market in yesterday's session, the volume of SBV bills circulating in the market increased to VND29,999.5 billion.

The stock market had a sluggish trading session, with major indices hovering around the reference level with low trading volume. At the end of the session, VN-Index increased by 9.51 points (+0.77%) to 1,245.0 points; HNX-Index added 0.19 points (+0.08%) to 234.03 points; UPCoM-Index increased by 0.11 points (+0.12%) to 90.77 points. Market liquidity continued to decrease compared to the previous session with a trading value of over VND 22,800 billion. Foreign investors net sold nearly VND 437 billion on all three exchanges.

UOB Bank, Singapore, has just forecast Vietnam's GDP growth in the first quarter of 2024 at 5.5%, higher than the 3.3% increase in the same period in 2023, while maintaining Vietnam's growth forecast for 2024 at 6.0%, within the official target of 6.0-6.5%. The bank predicts that inflationary pressures will continue to increase, with the forecast of the headline CPI to increase to 3.8% in 2024, from 3.25% in 2023. UOB believes that the VND is likely to recover slightly, forecasting USD/VND to be at 24,400 VND/USD in the second quarter of this year, then fall to 24,200 VND/USD in the third quarter and to 24,000 VND/USD in the fourth quarter of 2024.

International news

The US received inflation-related indicators in February. The US Census Bureau said that the headline consumer price index (CPI) and core CPI in the US both increased 0.4% compared to the previous month in February, after increasing 0.3% and 0.4% respectively in the previous month, nearly matching the experts' forecast of 0.4% and 0.3% increases.

This means that the headline CPI in the country increased by about 3.2% compared to the same period in 2023, contrary to the forecast of a flat month-on-month increase of 3.1%. Detailed figures show that energy prices are no longer a problem for inflation, with the index showing a decrease of 1.9% compared to the same period.

However, some opinions say that the CPI in February is still high, forcing the US Federal Reserve (Fed) to continue waiting for a more appropriate time to reduce policy interest rates. According to CME forecasts, there is a 99% chance that the Fed will not raise policy interest rates at the meeting on March 20, the dominant scenario still shows that the first cut will take place at the meeting on June 12.

The UK labour market recorded some important indicators. The UK Office for National Statistics (ONS) said that the number of unemployment benefit claims in the country increased by 16.8 thousand in February after increasing by 3.1 thousand in the previous month, lower than the forecast of 20.3 thousand. The unemployment rate in the country also increased to 3.9%, contrary to the forecast of continuing to stay at 3.8% as in January. Finally, average earnings in the UK increased by 5.6% compared to the previous 3 months in 12-1-2, slowing slightly from the 5.8% increase in 11-12-1 and at the same time lower than the forecast of 5.7%.

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