According to the currency market report on the week of January 2nd 6th 2019 of SSI Retail Research showed that the State Bank of Vietnam (SBV) net withdrew 24.768 trillion dong via Open Market Operations (OMO) channel in the first week of the New Year.
In particular, the amount of net injection (buying forward) was 30.640 trillion dong and withdrawal (maturity) was 55.408 trillion dong. The bill channel continued to see no transaction and the bill balance is currently maintained at zero. The buying forward interest rate on OMO remained 4.75 percent per annum, a level which has been maintained for nearly a year.
On the last trading day of the year (December 28th 2018), interbank rates increased sharply. However, at the beginning of the year, the rates dropped by 15-20 basis points and moved sideways at 4.8 percent per annum on overnight term and 4.85 percent per annum on one-week term. The interest rates on market 1 were also kept stable as the peak time for mobilising capital to meet the financial targets under the Basel II standards and Circular 16/2018/TT-NHNN regulating the ratio of using short-term funds for medium and long-term lending has passed.
Chair of the US Federal Reserve (Fed) Jerome Powell has recently said that the agency is aware of the risks and will be patient and flexible in policy decisions this year. He also added that the US economy is basically well-maintained based on two basic indicators of unemployment and inflation.
According to SSI Retail Research, the message of the Fed’s Chair has reassured concerns about the slowdown of the US and helped the market expect of a slower interest rate increase roadmap, reducing the pressure on the global interest rate level in the short term. However, in the long term, the Fed’s current interest rates are still fairly low and will continue to be raised if the US unemployment rate is kept at the current level.
