The State Bank of Vietnam continues to withdraw VND 20,000 billion through the issuance of treasury bills.

Similar to previous issuances, the treasury bills have a 28-day maturity, but the winning bid interest rate this time increased to 0.9% per annum, significantly higher than the 0.68% per annum rate in yesterday's auction. Eleven bidders participated, with ten winning bids.

Thus, in the past 16 treasury bill auctions, the State Bank of Vietnam has withdrawn nearly 185,700 billion VND from the system, a figure far exceeding the forecast of a major securities company which predicted that the State Bank of Vietnam could withdraw 130,000 billion VND.

According to the latest data released by the State Bank of Vietnam, the average interbank VND interest rate for overnight maturities (the main maturity accounting for approximately 90% of transaction value) on October 11th decreased to 0.37% from 0.66% on October 10th and 0.95% on October 9th.

Results of the treasury bill auction on October 12th.

Compared to the 1.32% interest rate recorded on October 5th, the average overnight interbank interest rate has decreased by nearly 1 percentage point.

Interest rates for other key maturities also tended to decrease: the 1-week maturity fell from 1.55% to 0.9%; the 2-week maturity fell from 1.89% to 1.4%; and the 1-month maturity fell from 1.9% to 1.75%.

The State Bank of Vietnam (SBV) began using open market operations to withdraw money from the market at the end of September. The purpose is to reduce liquidity in the banking system and support the exchange rate.

According to experts, the State Bank of Vietnam (SBV) will primarily use open market operations to absorb excess liquidity from now until the end of the year. However, the SBV will not reverse its policy this year, and exchange rate risks will decrease after the US Federal Reserve (Fed) stops raising interest rates in the fourth quarter.

Source: https://vietnamnet.vn/nhnn-tiep-tuc-hut-ve-20-000-ty-dong-thong-qua-phat-hanh-tin-phieu-2201316.html