Economic news review on May 22

The central exchange rate increased by 3 VND, the VN-Index decreased by 10.23 points, or the Government determined to continue implementing the policy of exempting and reducing interest rates, extending, postponing, restructuring debts, and exempting, reducing, and extending taxes, fees, charges, and land rents to remove difficulties for production and business... are some notable economic news on May 22.

Economic information review

Domestic news

In the foreign exchange market session on May 22, the State Bank listed the central exchange rate at 24,254 VND/USD, an increase of 03 VND compared to the previous session.

The buying and selling prices of USD are kept unchanged by the State Bank of Vietnam at 23,400 VND/USD and 25,450 VND/USD, respectively.

On the interbank market, the USD-VND exchange rate closed at 25,466 VND/USD, continuing to increase by 03 VND compared to the session on May 21.

The dollar-dong exchange rate on the free market remained unchanged in both buying and selling directions, trading at 25,650 VND/USD and 25,740 VND/USD.

On May 22, the average interbank VND interest rate increased sharply by 0.30 - 0.47 percentage points in all terms of 1 month or less compared to the previous session; specifically: overnight 4.63%; 1 week 4.73%; 2 weeks 4.85% and 1 month 4.98%.

The average interbank USD offering interest rate remained unchanged for most terms, except for a 0.01 percentage point increase for the 1-month term, trading at: overnight 5.27%; 1 week 5.32%; 2 weeks 5.39%, 1 month 5.42%.

Government bond yields in the secondary market remained unchanged for the 3-year term while increasing sharply for the remaining terms; closing at: 3-year 1.86%; 5-year 2.04%; 7-year 2.34%; 10-year 2.85%; 15-year 3.03%.

In the open market operations on the mortgage channel, the State Bank of Vietnam offered VND25,000 billion with a term of 07 days, the interest rate increased to 4.5%. There were VND24,999.99 billion in winning bids, VND2,791.17 billion in maturing. The State Bank of Vietnam offered 28-day term State Bank bills, bidding on interest rates. There were VND650 billion in winning bills with an interest rate increased to 4.0%, there were VND1,400 billion in maturing bills.

Thus, the State Bank of Vietnam pumped a net VND22,958.82 billion into the market, the volume of treasury bills circulating in the market decreased to VND56,340 billion, the volume on the mortgage channel increased to VND28,047.31 billion.

On the bond market on 22/25, the State Treasury successfully mobilized VND5,191 billion/VND9,500 billion of government bonds called for bid (winning rate 55%). Of which, the 5-year term mobilized VND2,000 billion/VND3,000 billion of bids, the 10-year term mobilized VND2,200 billion/VND3,000 billion, the 15-year term mobilized VND200 billion/VND2,000 billion and the 30-year term mobilized VND791 billion/VND1,000 billion of bids. The 20-year term mobilized VND500 billion, however, there was no winning volume. The winning interest rate for the 5-year term is 1.75% (+0.03 percentage points compared to the previous auction), the 10-year term is 2.66% (+0.05 percentage points), the 15-year term is 2.83% (+0.05 percentage points), and the 30-year term is 3.06% (+0.03 percentage points).

On the stock market today, profit-taking pressure caused red to cover many stocks, especially blue-chips. At the end of the session, VN-Index decreased by 10.23 points (-0.80%) to 1,266.91 points; HNX-Index added 1.86 points (+0.76%) to 245.15 points; UPCoM-Index increased by 0.25 points (+0.26%) to 94.70 points. Market liquidity was high with a trading value of nearly VND 32,300 billion. Foreign investors continued to net sell more than VND 767 billion on all three exchanges.

According to the Government's Report on the additional assessment of the socio-economic situation and the state budget in 2023; the implementation of the socio-economic plan and the state budget in the first months of 2024 presented to the National Assembly on May 21, the Government determined to continue implementing the policy of exempting and reducing interest rates, deferring, postponing, restructuring debts and exempting, reducing, and extending taxes, fees, charges, and land rents to remove difficulties for production and business. It is expected that in the last 6 months of the year, the Government will issue policies to exempt and reduce taxes, fees, and charges, with a total estimated amount of about 98 trillion VND; of which, a 2% reduction in value added tax.

International news

Last night, Vietnam time, the US Federal Reserve (Fed) released the minutes of its meeting in late April and early May. In this document, the Fed stated that the US economy continued to expand solidly in the first quarter, with employment increasing and unemployment remaining low. Inflation has cooled over the past year, but the current months have not shown much progress towards the target of moving towards 2.0%. Inflationary pressures have shown signs of increasing again for a number of factors, in both goods and services prices.

Members of the Federal Open Market Committee (FOMC) unanimously agreed to maintain the policy rate at 5.25% - 5.50% to achieve full employment and inflation at the 2.0% target in the future. The FOMC also maintained the view that it will carefully evaluate the data before making any adjustments to the policy rate, and does not expect to cut again until it has greater confidence that inflation is moving sustainably toward the target.

In addition, starting in June this year, the FOMC will slow down the process of shrinking its balance sheet, from shrinking 65 billion USD/month to 25 billion USD/month.

The UK Office for National Statistics (ONS) said that the headline CPI and core CPI in the country increased by 2.3% and 3.9% respectively compared to the same period in April, both slowing down compared to the 3.2% and 4.2% of the previous month, but not reaching the 2.1% and 3.6% levels forecast by experts. The above figures show that the headline CPI is at its lowest level since August 2021 and the core CPI is at its lowest since November 2021. In addition, the headline CPI has also come close to the 2.0% target pursued by the Bank of England (BoE).

Source: https://thoibaonganhang.vn/diem-lai-thong-tin-kinh-te-ngay-225-151934-151934.html