Interest rates can be reduced by 10-30 basis points

2 min read

SSI Securities Analysis Center – SSI Research has a money market report for the week of September 7-11. The report mentions that the State Bank (SBV) does not conduct transactions on the open market. The liquidity of commercial banks was still very abundant, the interbank interest rates were flat, closing the week at 0.2% / year for the overnight term and 0.23% / year for the 1-week term.

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The deposit interest rates did not change much, popularly at 3-4% / year for terms of less than 6 months, 4.2-6% / year for terms of 6 to less than 12 months and 5-6.7%/ year for a term of 12, 13 months. According to the State Bank of Vietnam, the total means of payment (M2 money supply) at the end of July was 11.16 million VND, up 5.6% compared to the end of 2019, which is much lower than the 7 -8% of the same period 3 years earlier.

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Therefore, the monetary loosening policy of the State Bank will continue to be maintained, and the liquidity of commercial banks will remain abundant. Interbank interest rates will remain at a low level, and deposit interest rates may decrease further by 10-30 basis points in the near future.

The supply of foreign currency is abundant, the VND continues to be stable

In addition to the complicated disease developments, the US and Chinese mutual response measures were the focus of last week. China restricts visas for American journalists, causing the US to also revoke visas for more than 1,000 Chinese citizens. Besides, the Brexit issue also got hot again after the British Government announced the Internal Market Bill which changed some terms signed by UK and EU last year. The Pound has lost 3.64% against the USD, supporting the dollar to recover, the DXY index rose from 92.7 to 93.3 in the past week.

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Listed USD / VND exchange rate of commercial banks continued to go sideways at 23,060 / 23,270 VND / USD and decreased slightly by 10 VND / USD on the unofficial market, to 23,180 / 23,210 VND / USD. Currently, Vietnam has 11 consecutive days without Covid-19 infection in the community, international flights are gradually resuming. Market sentiment is stable and foreign currency supply and demand are very favorable, so the exchange rate is expected to continue moving sideways in the near future.

Source: ndh.vn – Translated by fintel.vn