State Bank of Vietnam net withdraws more than 20,000 billion VND

Specifically, the State Bank injected nearly VND5,920 billion into the market with an interest rate of 4%/year, while the maturity volume was up to about VND26,270 billion, leading to a net withdrawal from the system of VND20,350 billion.

Interbank interest rates remained low, with overnight rates remaining below 3%. At the April 28 session, overnight rates were 2.54%, up 0.08 percentage points from the lowest level last week. Terms from one week to three months ranged from 4.16% to 4.77%, down from the session at the end of last week (except for the three-month term).

The State Bank shows flexibility in operating monetary policy to control liquidity and stabilize the financial market.

The SBV's net withdrawal in the context of low interbank interest rates shows that the banking system has abundant liquidity. The SBV's withdrawal of money from the system aims to control the amount of money in circulation, stabilize the money market and support monetary policy objectives.

On the other hand, the net withdrawal of the State Bank has had impacts on the financial market in many aspects, specifically:

Withdrawing some VND from the system could help reduce pressure on the VND/USD exchange rate, especially in the context of a decreasing interest rate differential between VND and USD.

At the same time, reduced liquidity in the banking system could affect cash flow into the stock market, especially bank stocks such as CTG, MBB and ACB.

And if liquidity continues to be drained, lending rates in the market may increase slightly, affecting borrowing costs for businesses and consumers.

On the other hand, the State Bank of Vietnam still prioritizes supporting system liquidity through reverse repurchase agreements (RRP) with a base interest rate of 4% for terms from 7 to 35 days, with a total issuance value of VND220,000 billion in April. Meanwhile, the USD/VND exchange rate continued to increase, reaching VND24,956/USD on May 3, an increase of VND614 compared to the beginning of the year.

However, from a macro perspective, the SBV's net withdrawal of more than VND20,000 billion shows flexibility in monetary policy management to control liquidity and stabilize the financial market. Investors and businesses need to closely monitor further developments to have appropriate financial plans./.

Source: https://baodaknong.vn/nhnn-hut-rong-hon-20-000-ti-dong-251720.html