State Bank continues to absorb nearly 15,000 billion VND of credit bills

On March 13th, the State Bank of Vietnam successfully auctioned off 14,999.7 billion VND worth of 28-day treasury bills with an interest rate of 1.4% per annum.

Accordingly, 12 out of 13 participating members won the bid through the interest rate and unit price bidding methods. The treasury bills will mature on April 10, 2024.

Previously, on March 11th, the State Bank of Vietnam also reopened the treasury bill auction channel, withdrawing nearly 15,000 billion VND from the system after a four-month suspension of this operation.

The operation of injecting and withdrawing money through treasury bills is a normal operation of the State Bank of Vietnam that affects the amount of money in the interbank market (where banks borrow from each other), and does not circulate in the retail market.

According to experts, withdrawing money through treasury bills will cause a certain amount of non-circulating money to flow from the commercial banking system into the State Bank. This activity does not affect overall liquidity or the supply and demand of foreign currency, but indirectly impacts the exchange rate.

Analyzing further, economist Dinh Trong Thinh argues that issuing treasury bills will help balance the exchange rate by drawing VND out of circulation, thus reducing the amount of money in the market, easing exchange rate pressure, and bringing VND and USD into balance.

Previously, explaining the reason for withdrawing money through treasury bills, Deputy Governor of the State Bank of Vietnam Pham Thanh Ha said that the US dollar has appreciated sharply recently and the State Bank of Vietnam is closely monitoring the foreign exchange market as well as focusing on managing to stabilize the exchange rate.

According to the Deputy Governor, the State Bank of Vietnam has had to regulate short-term treasury bills to reduce excess liquidity in the system; while trying to avoid a significant impact on interest rates. Currently, interbank market interest rates remain stable. However, the pressure in the coming period will remain very high as we need to balance interest rates and exchange rates.

On March 13th, the State Bank of Vietnam announced the central exchange rate at 23,957 VND/USD, an increase of 2 VND/USD. However, if calculated from March 11th (when the State Bank of Vietnam issued treasury bills) to the present, the central exchange rate has decreased by 15 VND, from 23,972 VND to 23,957 VND/USD.

Meanwhile, the VND/USD exchange rate at commercial banks showed mixed movements. At Vietcombank, the USD price was listed at 24,450 - 24,820 VND/USD (buy - sell), an increase of 20 dong in both buying and selling rates compared to yesterday's closing rate. At BIDV , the USD price was listed at 24,490 - 24,800 VND/USD (buy - sell), remaining unchanged in both buying and selling rates compared to yesterday's closing rate.

According to VNA

Source: https://doanhnghiepvn.vn/kinh-te/ngan-hang-nha-nuoc-tiep-tuc-hut-gan-15-000-ty-dong-tin-phieu/20240314090230128