A summary of economic news on February 1st.

The central exchange rate decreased by 31 dong, the VN-Index increased by 8.71 points, and the price of RON 95-III gasoline increased by 760 dong, while the price of E5 RON gasoline increased by 740 dong... These are some of the notable economic news items on February 1st.

Review of economic news

Domestic News

In the foreign exchange market on February 1st, the State Bank of Vietnam listed the central exchange rate at 23,960 VND/USD, a sharp decrease of 31 dong compared to the previous session.

The buying price of USD was kept unchanged at 23,400 VND/USD by the State Bank of Vietnam's exchange rate department, while the selling price of USD was listed at 25,108 VND/USD, 50 dong lower than the exchange rate ceiling.

On the interbank market, the dollar-dong exchange rate closed at 24,400 VND/USD, down 15 dong compared to the January 31st session.

The US dollar-Vietnamese dong exchange rate on the free market fell sharply by 250 dong in the buying rate and 200 dong in the selling rate, trading at 24,700 VND/USD and 24,800 VND/USD respectively.

On February 1st, the interbank money market saw a sharp increase in the average quoted interbank VND interest rate, rising by 0.10 - 0.22 percentage points across most maturities of 1 month or less, except for a decrease of 0.06 percentage points in the overnight rate. Specifically: overnight 1.0%; 1 week 1.44%; 2 weeks 1.72%; and 1 month 1.84%.

The average interbank USD lending rate decreased by 0.02 percentage points for the overnight term, while increasing by 0.01 percentage points for the 1-week term and remaining unchanged for the other terms, trading at: overnight 5.19%; 1 week 5.29%; 2 weeks 5.33%, 1 month 5.40%.

Government bond yields in the secondary market remained unchanged for the 3-year maturity while increasing for other maturities, closing at: 3 years 1.19%; 5 years 1.39%; 7 years 1.82%; 10 years 2.29%; 15 years 2.51%.

Yesterday's open market operations, on the repurchase agreement channel, saw the State Bank of Vietnam (SBV) offer 1,000 billion VND with a 7-day maturity, maintaining the interest rate at 4.0%. There were no successful bids and no maturing transactions yesterday. Therefore, 2.28 billion VND is outstanding on the repurchase agreement channel. The SBV did not offer any SBV bills, and no bills are currently in circulation on the market.

On February 1st, despite facing increased pressure in the latter half of the afternoon session, the stock market still experienced short upward movements to close in positive territory. At the end of the trading session, the VN-Index rose 8.71 points (+0.75%) to 1,173.02 points; the HNX-Index lost 1.40 points (+0.61%) to 230.57 points; and the UPCoM-Index edged up 0.33 points (+0.38%) to 88.02 points. Market liquidity decreased, with trading value reaching nearly 16,900 billion VND. Foreign investors continued to be net buyers, purchasing nearly 162 billion VND across all three exchanges.

In the fuel price adjustment on February 1st, the Ministry of Finance and the Ministry of Industry and Trade decided to increase the prices of all popular petroleum products on the market from February 1st, 2024. Accordingly, the price of RON 95-III gasoline increased by 760 VND, to 24,160 VND per liter; E5 RON increased by 740 VND, to 22,910 VND per liter. Retail diesel prices increased by 620 VND/liter, to 20,990 VND/liter, while kerosene increased by 380 VND/liter, to 21,330 VND/liter. Mazut increased by 590 VND/kg, to 16,080 VND/kg.

According to the latest Purchasing Managers' Index (PMI) report from S&P Global, Vietnam's manufacturing PMI rose to 50.3 points in January, up from 48.9 points in December 2023. Overall business conditions improved thanks to a slight rebound in new orders and output. Accordingly, the recovery in domestic and export market demand contributed to the first increase in total new orders and new export orders in three months. This is an encouraging start to 2024 for Vietnam's manufacturing sector.

International News

The Institute for Supply Management (ISM) reported that the U.S. manufacturing PMI stood at 49.1% in January, up from 47.4% the previous month, contrary to forecasts of a slight decline to 47.2%. While still showing a slight contraction, this was the highest manufacturing PMI recorded since November 2022.

Next, the number of initial jobless claims in the US for the week ending January 27th was 224,000, up from 215,000 the previous week and contrary to forecasts of a slight decrease to 213,000. The four-week average was 207,750, up 5,250 from the previous four-week average.

The Bank of England (BoE) did not change its policy interest rate at its first meeting of the year. In yesterday's meeting (February 1st), the BoE stated that the UK's GDP will gradually recover in the coming period after the slump caused by the high interest rate environment. The labor market is gradually easing, but is still considered tight compared to historical levels. Wage growth has also slowed recently. Inflation in the UK in December 2023 fell to 4%, lower than expected in the BoE's November report.

Accordingly, the Bank of England (BoE) forecasts that inflation will continue to fall to its target of 2.0% in the second quarter of 2024, before rising again in the third and fourth quarters. The CPI for the whole year 2024 could increase by approximately 2.75%.

At this meeting, the Bank of England (BoE) decided to keep its policy interest rate unchanged at 5.25% in order to bring inflation to its target level within a reasonable timeframe. The institution also affirmed that it will continue to closely monitor inflation and economic indicators to determine how long to maintain the policy interest rate at its current level.

The European Union's statistical office (Eurostat) announced that the overall CPI and core CPI in the Eurozone increased by 2.8% and 3.3% year-on-year in January, both lower than the 2.9% and 3.4% of the previous month, but not yet reaching the 2.7% and 3.2% levels expected by experts.

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