HCMC – The State Bank of Vietnam, the central bank, has withdrawn nearly VND10,000 billion from the market through a Government bond issue, reported the local media.
The banking system is sitting on mountains of cash due to the woefully low demand for new loans in the economy. The central bank’s debt sale is expected to ease pressure on exchange rates in the near future, according to the Vietnam News Agency.
After almost 15 weeks of no transactions through open market operations (OMO), the SBV conducted a debt auction on September 21, offering VND9,995 billion worth of 28-day Government bonds through OMO.
These bonds carry a coupon rate of 0.69% per year, which is higher than the average interbank interest rate of 0.15% recorded on September 19.
Four state-run commercial banks – BIDV, Vietcombank, VietinBank and Agribank – have lowered their term deposit interest rates by 0.2 to 0.3 percentage point. These rates now range from 3.5% to 5.5% per year, the lowest since the outbreak of the Covid-19 pandemic.