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State Bank “shows off”

Interest rates rise

According to the recently released money market report, the analysis department at SSI Securities Company said that in the past week, the State Bank of Vietnam has injected 4.3 trillion dong into the banking system through banking transactions. buy 14-day term with interest rate of 2.5%/year. These transactions were mainly on the last trading day of April (the amount of T-bills injected on April 29 was 3.1 trillion dong).

Meanwhile, the total maturity volume was recorded at VND 987 billion and helped the outstanding volume increase to more than VND 6 trillion.

Interest rates rebounded, straining USD liquidity: State Bank

Source: SSI

SSI Research believes that the liquidity of dong in the system has partly appeared under pressure in the context of good credit growth and the State Bank’s move to sell USD futures.

VND interest rates on the interbank market jumped sharply on the last trading day of last week (the week from April 25 to 29). At the end of last week, the overnight interest rate was at 2.3% (up 40 basis points from the previous week) and 1 week term at 2.6% (up 60 basis points).

During the Government meeting in April, the State Bank announced that credit as of April 25 increased by 6.75% compared to the end of 2021, equivalent to an increase of 16.4% over the same period.

Contrary to experts’ comments in the previous report, who predicted that credit might be affected when the Government tightens corporate bonds and real estate, the fact that credit still maintains its expansion momentum. SSI Research considers this to be a positive sign, showing that credit capital actually flows into production activities in the context of a strong recovery of the economy.

Accordingly, SSI experts expect credit growth in 2022 to be 14-15%. Improved credit leads to an increase in residential and corporate savings interest rates. In recent weeks, some banks have continued to increase their savings deposit interest rates in both regions, with an increase of 10-20 basis points.

Dan Viet’s survey also showed that the savings interest rate schedule at many banks in April was “added” by 0.1 percentage point – 0.3 percentage point at tenors, especially in the second half. April. Currently, the highest savings interest rate is standing at 7.6%/year.

Stretching USD liquidity, the State Bank “shows off”

As for the foreign exchange market, the VND has been mostly flat in the past week in the context that currencies in the region have come under downward pressure due to the strong increase of the USD in the international market when the market is expecting the Federal Reserve to The US state (Fed) will raise 50 basis points at its May meeting, amid an increase in inflation in the US above 8% and a shortage of workers in the labor market in this country.

At the end of the policy meeting on May 4, the Federal Open Market Committee (FOMC) decided to raise interest rates by 50 basis points to control inflation, which is at a 40-year high. Accordingly, the Fed’s federal funds rate will fluctuate in the range of 0.75 – 1%.

In addition to raising interest rates, the US central bank also signaled it would reduce the amount of assets it holds on its balance sheet of $9 trillion. The plan will begin next June, in phases.

Specifically, from June 1, the Fed will reduce $ 30 billion in US Treasuries and $ 17.5 billion in mortgage-backed securities each month. After three months, the drop for Treasuries and mortgages will increase to $60 billion and $35 billion, respectively.

According to experts, pressure on the foreign exchange market has appeared in the past 3 weeks and the State Bank has had to use a tool to sell 3-month USD contract to support USD liquidity in the market. – for the first time since mid-2018.

However, the analysis department believes that the supporting factor for VND in this period continues from the positive supply of USD (the trade balance is estimated to have a trade surplus of USD 2.5 billion in the first 4 months of the year and disbursed FDI reached USD 2.5 billion). $5.9 billion).

Interest rates rebounded, straining USD liquidity: State Bank

Source: SSI

According to experts at BVSC, by the end of April, VND decreased by 0.53% compared to the end of last month. Compared to the end of 2021, the VND also decreased by 0.57%. Meanwhile, in the world market, the DXY index recorded an increase of 5.40% month-on-month and 8.31% compared to the beginning of the year.

All currencies in emerging Asian countries (according to BVSC’s tracking form) still saw a decline against the USD in the first month of 2022. In which, the Korean won had the strongest decline. , at 6.56%.

According to BVSC, after the statements of some Fed members about the Fed’s drastic increase in interest rates, along with the start of quantitative tightening in the context of US inflation continuing to climb – This made the VND USD had a strong increase again, and at the same time made other currencies depreciate.

However, with a stable macro economy and large foreign exchange reserves, BVSC believes that exchange rate fluctuations in 2022 will not be too large, fluctuating around +/-2% this year.

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