HCMC – Vietnam’s central bank net withdrew over VND30 trillion from the market last week as the banking system saw surplus liquidity due to slow credit growth.

It issued 7-day and 91-day treasury bills totaling VND107 trillion, with the 7-day term accounting for much of the amount, at VND87 trillion.

“The issues aim to absorb excess liquidity in the banking system amid slow credit growth early this year,” SSI Research said in its latest market report.

The interbank rates inched up slightly to 4.7% for the 7-day term and 5.5% for the 91 day-term last Friday, February 17.

During the first half of February, the central bank withdrew VND152 trillion and pumped VND49 trillion into the system, leading net withdrawals of VND103 trillion.

The move showed the central bank’s intention to drive the interbank rate benchmark higher than the U.S. federal funds rate ahead of the Federal Reserve meeting to be held in March, according to SSI Research.