HCMC – The State Bank of Vietnam (SBV) has withdrawn nearly VND90 trillion from the banking system through six consecutive rounds of Treasury bill auctions.
Each Treasury bill comes with a 28-day term and is sold through interest rate auctions. Winning banks are required to pay the SBV and will receive both principal and interest upon maturity. The money will be re-injected into the interbank market 28 days after the issuance date.
On September 28, the SBV offered Treasury bills at an interest rate auction. Of the 11 participating members, eight were successful bidders. The total volume of successful bids amounted to nearly VND20 trillion, with an interest rate of 0.7%.
This was the sixth consecutive Treasury bond issue by the SBV. Previously, on September 21, the central bank resumed the withdrawal of money from the market through Treasury bill sales after more than six months of suspension.
This is an effort by the SBV to ease the pressure from idle cash in the banking system at a time when interbank interest rates remain at their lowest levels since the beginning of 2021.
In the two sessions held on September 21 and 22, the SBV auctioned nearly VND20 trillion in 28-day Treasury bonds, and withdrew the same amount from the system.
On September 25, the central bank issued VND10 trillion worth of bonds with a winning interest rate of 0.49% for a 28-day term. On September 26 and 27, it doubled the issue volume to VND20 trillion per day with a respective interest rate of 0.58% and 0.65%.
According to experts, the move is seen as a timely strategy given excess liquidity in the banking system, which will help alleviate pressure on exchange rates in the near future.