ANTD.VN - Interbank interest rates increased sharply after the State Bank continuously withdrew money through treasury bills, showing that the liquidity of the banking system has somewhat reduced excess.
According to the latest data released by the State Bank of Vietnam (SBV), the average interbank VND interest rate on October 20 for the overnight term (the main term accounting for 90% of the transaction value) increased sharply by nearly double, to 1.47%/year from 0.79%/year recorded in the previous session (October 19). This is also the highest interest rate for this term since mid-June 2023.
Thus, compared to the end of last month, the interest rate for this term has increased 10 times (at the end of September, the overnight interest rate was only 0.15%/year).
In addition, interest rates for other key terms also increased sharply. The 1-week term increased to 1.64%; the 2-week term to 1.66%; and the 1-month term to 1.86%.
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Banking system liquidity is no longer excessive. |
Interbank interest rates have been on a strong upward trend in recent sessions, after the State Bank continuously withdrew money through the treasury bill channel. Since reopening this channel on September 21, the operator has continuously withdrawn 22 sessions with a total amount of nearly VND241,600 billion.
Along with the sharp increase in interbank interest rates, showing that liquidity has somewhat decreased, the amount of money withdrawn has also gradually decreased. In the session on October 23, the total volume of issued bills was only 850 billion VND and the previous session was 1,650 billion VND.
During peak sessions, the operator has absorbed up to 20,000 billion VND per session. The winning interest rate in the most recent sessions has also increased sharply to 1.45%/year, compared to the level of just over 0.5%/year in the first sessions.
The SBV's move to issue treasury bills aims to adjust the system's liquidity in the context of banks having excess money. This is also a business to reduce exchange rate pressure, by pushing up interbank interest rates for VND, helping to narrow the interest rate gap between USD and VND.
The excess liquidity in the system has been repeatedly confirmed by the SBV leaders, due to the very limited credit growth and the lack of demand for loans by businesses. SBV leaders affirmed that they will operate flexibly to reduce pressure on exchange rates and interest rates for businesses.
Deputy Governor of the State Bank of Vietnam Dao Minh Tu said that the agency will manage the exchange rate stably. “Businesses can rest assured about the exchange rate. Currently, the exchange rate is still fluctuating within the allowed range, we affirm that we will manage to prevent the psychology of hoarding foreign currency waiting for the exchange rate to increase. Currently, abundant foreign exchange reserves, FDI capital flows continue to grow, other foreign currency sources are also developing positively... are the basis for stabilizing the exchange rate,” said the Deputy Governor.
Regarding interest rates, the State Bank leader said that this agency will continue to operate in a stable direction, and reduce them further when conditions permit. Even the operating interest rate can be reduced further if conditions are suitable.
However, the representative of the State Bank also admitted that interest rate management is the most difficult problem in macroeconomic management today. Because when interest rates decrease sharply, exchange rate stability is at risk of being broken, affecting foreign debt, national credit rating, etc.
This forces the State Bank to consider and harmonize many factors in conducting monetary policy.
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