The Treasury bill issue by the State Bank of Vietnam (SBV) to withdraw money from the banking system has left the market puzzled. This move appears to have multiple objectives for addressing the current challenges. An unexpected action? In late September, the SBV, or the central bank, took the market by surprise by relaunching a T-bill issue. Notably, on September 21, T-bills worth nearly VND10 trillion were issued through an auction in which 17 participants took part, with two of them winning at a coupon rate of 0.69% per annum. On September 22, an additional VND10 trillion worth of such bills was put up for auction, and five of 16 participants won with an annual coupon rate of 0.5%. Another VND10 trillion bill auction was held on September 25, with four of 13 participants winning with a lower rate, at only 0.49% per annum. The three issues come with a 28-day term. Given that the central bank had refrained from selling T-bills for about six months (since March 10), its recent move has raised eyebrows, especially at a time when expansionary monetary policy is vital for fueling much-needed economic growth. However, in light of the current circumstances, the SBV’s move, […]