Interbank interest rates surge
HCMC – The interbank market has seen interest rates for Vietnam dong loans rising sharply over the past two days, an unprecedented market movement, market participants said.
Financial organizations said an upsurge in interbank rates indicated that the domestic currency and foreign exchange markets would undergo unexpected developments this year.
Interbank rates for tenors of less than two weeks climbed by 18-46 basis points on January 10. Overnight and one-week rates each rose to 4.96% per year, the two-week rate 5.04% per year and the one-month rate 5.2% per year. On Monday, interbank rates for all tenors edged up 10-50 basis points.
On open market operations (OMO), the State Bank of Vietnam (SBV) on January 10 issued VND15 trillion of debt with 58% of it acquired by credit institutions. Meanwhile, some VND994 billion fell due, thus leaving a net injection of VND7.73 trillion into the system.
As of January 9, the total volume of money had surpassed VND30.07 trillion on OMO.
Despite ample Vietnam dong currency liquidity, interbank rates have gone up due mainly to pressure from the foreign exchange market. The U.S. dollar has strengthened against the dong over the past few days. The exchange rate stood at VND22,525-22,530 per dollar in Monday morning trade and soared to VND22,575-22,580 in the rest of the session.
The SBV on January 10 announced the reference exchange rate of VND22,167 to the dollar, down VND1 from the previous day. Accordingly, commercial banks could quote their dollar buying and selling prices in a range of VND21,502 and VND22,832.
The reference exchange rate was VND22,168 on Monday, up VND14 versus last Friday. The central bank quoted the dollar selling price at VND22,783, VND50 lower than the allowable ceiling.
The exchange rate stood at VND22,585 on the interbank market, up VND25 compared to the previous trading day.
On the informal market, the dong-dollar exchange rate was VND22,920-22,940, down from last Friday.
Meanwhile, the annual overnight rate for dollar loans stands at 1.2% at present, the one-week rate 1.35%, the two-week rate 1.5%, the one-month rate 1.6% and the three-month rate 1.82%.
On the secondary Government bond market, bond yields for all tenors are slightly volatile.
The greenback has weakened against other currencies on world markets due to U.S. Federal Reserve (Fed) officials’ unclear words about the tightening of monetary policy.
The global gold price has gone up amid the dollar’s depreciation. Spot gold has climbed 0.65% to US$1,182.46 an ounce.
On the home market, Saigon Jewelry Company (SJC) quoted a tale of gold at VND36.3 million for buying and VND36.62 million for selling, down nearly VND100,000 a tael. A tael equals to 1.2 troy ounces.
Domestic gold was VND4.3 million a tael higher than the world level.