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Interbank interest rates surge

HCMC – Interbank interest rates surged last week as the State Bank of Vietnam (SBV), the country’s central bank, shifted from net cash injections to withdrawals from the banking system.

February 2 saw the interbank rate for the 9-month term jumping to 13% per annum from the previous 9.61%, but the transaction volume was merely VND200 billion.

The overnight rate remained stable, at 6.26% a year, a little bit higher than the earlier session and 1.7% higher than the year-ago period.

Overnight lending accounted for about 95% of all transactions, topping VND225,700 billion.

Other interbank rates on loans with tenures of one week, two weeks, one month, three months and six months increased to 6.46%, 6.66%, 7.57%, 8.94% and 11.45% per year, respectively.

The rates stayed high despite the central bank’s steady cash injections in the banking system since the end of the Lunar New Year, indicating the liquidity problem plaguing the banking system is not yet over.

On February 3, the SBV withdrew VND15,000 billion from the banking system via sales of treasury bills with a seven-day tenure and a coupon rate of 5.79% a year.

Yesterday, February 6, it further drained another VND10,000 billion from the market by selling T-bills with seven-day terms and an annual coupon rate of 5.49%.

The interbank rates would stay high in the coming time as other central banks keep raising their interest rates amid inflation pressures, according to market observers.

In late 2022, the rates for overnight, one- and two-week terms, and one- and three-month terms registered at 4,5%; 5,2%; 5,6%; 6,2% and 6,7% per year, respectively.

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