The headquarters of the State Bank of Vietnam (SBV) in Hanoi. (Photo: VNA)The SBV last month issued more than 110 trillion VND of 28-daybills, and the bills will mature this month. As a result, a correspondingamount of cash will be pumped back into the banking system if the SBV does notissue new bills. However, given that interbank interest rates are still low, KBVietnam Securities Joint Stock Company (KBSV)’s analysts believe the SBV willcontinue to issue new bills to replace those that are maturing.
They explained that the move will be made as the overnightinterbank interest rate returns to very low levels while the interbank foreignexchange rate and the interest rate gap between US dollar-denominated depositsand Vietnamese dong-denominated deposits remain high. This will stimulatedollar speculation and put pressure on the foreign exchange rate.
KBSV’s analysts do not rule out the possibility that the SBV mighteven increase the size and term of bills to be issued in the coming time.
In fact, in recent sessions, the SBV has moved to increase cashwithdrawal through bill issuance. In the first nine trading sessions in earlyOctober, the SBV issued bills worth less than 10 trillion VND each, but fromOctober 12 to October 16, the SBV increased it to 20 trillion VND each. Even onOctober 17, the bill value reached 17.95 trillion VND and 12.05 trillion VND thefollowing day.
In the latest five trading sessions, the SBV withdrew 90 trillionVND, marking the strongest net withdrawal series since the bill issuancechannel resumed operations on September 21. At the same time, the winninginterest rate also remained at a high level of 0.9-1%, indicating a moreaggressive stance from the SBV in withdrawing cash./.
VNA
