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Wednesday, June 19, 2024

SBV hikes OMO rate to 4.5% as exchange rate comes under pressure

The Saigon Times

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HCMC – The State Bank of Vietnam (SBV) has raised the lending rate to 4.5% in open market operations (OMO) as the foreign exchange rate has come under rising pressure.

On May 22, the SBV announced that it had lent some VND25 trillion (US$1.1 billion) to nine banks at an annual interest rate of 4.5% for seven days through OMO. This marks the second OMO interest rate hike in a month.

On April 23, the SBV raised the interest rate in the OMO channel from 4% to 4.25% per year, and kept this rate unchanged until May 21.

The SBV on May 22 issued VND650 billion worth of T-bills with a 28-day term with a bid-winning coupon rate of 4% per year, up from 3.9% in the previous session, the highest rate since March 2023.

Experts suggest that the increase in the OMO rate could help the SBV reduce the selling of foreign currency reserves.

On May 22, VietinBank listed its dollar buying price at VND25,263 and its selling price at VND25,466. At Vietcombank and BIDV, each dollar is bought at VND25,266 and sold at VND25,466. Agribank quoted its rates at VND25,263 and VND25,463 for buying and selling, respectively.

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