SBV pumps more than 6.8tr dong on OMO last week: BVSC

As per the weekly bond report from October 29 to November 2 of Bao Viet Securities Co (BVSC), after seven weeks in a row of net withdrawal on open market operations (OMO), the State Bank of Vietnam (SBV) switched to net injection with a volume of 3.915 trillion dong.

The net injection was made mainly in late last week with a volume of nearly 5.4 trillion dong whereby the total volume of the money injection in the whole week reached 6.819 trillion dong and the total withdrawal was 2.904 trillion dong.

According to BVSC, the interbank interest rate tended to increase in early November. Therefore, BVSC said that the central bank’s net injection last week was to support the liquidity for the whole banking system to avoid changes in the interest rates on the interbank market in the following week.

Last week, the central bank withdrew 1.338 trillion dong via issuing Treasury bills for 91-day tenor at the unchanged coupon rate of 6 percent per annum.

On the interbank market, the interest rates were relatively stable and almost remained unchanged from the previous week. Particularly, the interest rate for overnight term was at 2.25-2.75 percent p.a., one week at 2.85-4.25 percent p.a., 2-weeks at 3.75-4.75 percent p.a. and one month at 6-7.5 percent p.a.

Transactions still occurred mainly in short tenors such as overnight and one week. The market was stable. The stable low interbank interest rates recently partly showed the plentiful liquidity of most of the banks.

In addition, this also indicated that the capital demand on the interbank market declined after the central bank asked commercial banks to spare a provision fund for their loans on the interbank market.

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