Interbank interest rates increase sharply as credit breaks out, the State Bank continuously withdraws money

ANTD.VN - The State Bank's continuous net withdrawal of large amounts of money from the system, along with signs of improvement in lending activities, has caused banks' liquidity to no longer be too surplus, and interest rates have accordingly increased sharply again in the interbank system.

According to the latest updated data from the State Bank, as of October 4, the average interbank interest rate for the key term of overnight (accounting for over 90% of the transaction value in the interbank market) has increased to 1.13%/year, up to 9 times compared to the end of last week (0.15%/year on September 28).

Similarly, most other terms also increased quite strongly. For example, the 1-week, 2-week, and 1-month terms also increased to 1.22%/year, 1.88%/year, and 1.52%/year, respectively (from 0.3%/year, 0.55%/year, and 1.14%/year, respectively, on September 28). The 9-month term increased from 6.62%/year to 7.32%/year.

The 6-month and 6-month terms decreased slightly, of which the 3-month term decreased from 4.07%/year to 3.32%/year; the 6-month term decreased from 5.75%/year to 4.7%/year.

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Banking system liquidity is no longer excessive.

The sharp increase in interest rates in the interbank market reflects that market liquidity has become less redundant as the State Bank of Vietnam continuously withdraws money. This is also the operator's goal, to reduce the interest rate difference between VND and USD, thereby indirectly supporting exchange rate stability.

In the trading session on October 5, the State Bank continued to offer 28-day treasury bills with the winning volume reaching nearly VND10,000 billion. Thus, after 11 consecutive sessions of withdrawing money through treasury bills, the operator has collected nearly VND130,700 billion from the system.

Previously, the State Bank reopened the channel to withdraw money through treasury bills on September 21 after more than 6 months of suspension, in the context of excess liquidity in the system and interest rates in the interbank market remaining at the lowest level since the beginning of 2021.

Not only interbank interest rates but also the winning interest rates of treasury bills have continuously increased in recent sessions. As of the trading sessions of October 4 and 5, the winning interest rates of treasury bills have increased to 1.3%, more than double compared to the first sessions and recorded the highest level since the beginning of the issuance.

Along with that, the number of members participating in the bidding for treasury bills decreased to 4-9 members compared to 11-17 members in the first bidding sessions, and the scale of winning bids tended to narrow.

The State Bank's use of treasury bills to absorb liquidity takes place in the context of a recent surge in credit growth, making the banking system's liquidity less abundant.

According to data from this agency, as of September 29, the credit scale of the entire system reached about 12,749 trillion VND, up 6.92% compared to the beginning of the year and higher than the forecast of the State Bank (6.1-6.2%).

Previously, the management agency said that by September 21, credit in the entire economy had increased by about 5.9% compared to the beginning of the year, reaching about 12.63 trillion VND. Thus, in just the last 8 days of September, credit increased by 1%, equivalent to about 120,000 billion VND pumped into the economy.

However, this development has not yet affected capital mobilization in the residential market. Recently, Vietcombank has even continued to announce a further reduction in mobilization interest rates, down to a maximum of only 5.3%/year. The remaining three state-owned banks (VietinBank, BIDV, Agribank ) still maintain the maximum interest rate of 5.5%/year.

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