*The State Bank net withdraws for the 4th consecutive week
According to the weekly monetary bulletin from March 12 to March 16 by Saigon Securities Incorporation (SSI), the State Bank of Vietnam (SBV) continued to issue 28-day tenor T-bills at 0.9 percent interest rate. The amount of T-bills issued during the week increased to 58.1 trillion dong (up 15.1 trillion dong from the previous week).
With 45 trillion dong due, the State Bank continued net withdrawing for the fourth consecutive week with a value of 13.090 trillion dong.
Only after the Lunar New Year, the State Bank net withdrew a total of 127.6 trillion dong from the system. The amount of T-bills in circulation has edged up to 106.6 trillion dong.
In terms of interbank interest rates, last week, the interbank interest rates were rather stable and new low levels were created. Compared to the end of last week, interest rates of terms slightly fell, trading at 0.8 percent, 0.97 percent, 1.67 percent and 2.73 percent, equal to overnight, one-week, one-month and three-month terms.
*Bond issuance is difficult due to rising expectations in interest rates
Last week, the State Bank called for four trillion dong for 10-year and 15-year terms. Bidding results were rather surprising when only 50 billion dong 15-year tenor bonds were issued with the interest rates remaining unchanged at 4.4 percent.
The bid-winning ratio was only 1.25 percent though the bidding volume was still rather positive with the total registration value of 9.9 trillion dong, 2.5 times higher than the offer volume. The reason was the market expected higher interest rates and pushed up bidding interest rates.
Since the beginning of the year, the State Treasury mobilised 34.5 trillion dong T-bills, equal to 17.3 percent of the year plan.
*Bond yields fluctuate adversely
Being affected by the primary market, bond yields tend to fluctuate in terms. Yields of short terms of less than five years maintained a slightly downward trend by 0.02-0.09 percentage points while long terms slightly increased 0.01-0.04 percentage points.
The total trading value of the market decreased more than 11 trillion dong from last week but still remained quite high at 46 trillion dong, equal to an average of 9.2 trillion dong per session.
Transactions of foreigners declined, the buying value fell from 2.076 trillion dong to 1.287 trillion dong, causing foreign investors to move from net buying to net selling of 394 billion dong.
*The foreign exchange market develops cautiously
Last week, the foreign exchange market witnessed cautious developments as the world political situation had many important events including the elections in Russia, China and Germany, as well as tensions in foreign relations between the U.K and Russia.
Besides, the market is waiting for the results of the U.S Federal Reserve (Fed)’s meeting on March 20-21 with a 94 percent forecast rate that Fed will raise interest rate. The DXY was moving around 90 points and only slightly improved 0.16 percent from the previous week.
The domestic exchange rate was stable at 22,725/22,795 dong/US dollar on the banking market and slightly decreased 10 dong to 22,770/22,785 dong on the free market.
