The State Bank of Vietnam (SBV) said on Thursday it had issued nearly VND10 trillion ($411 million) of treasury bills via auction with the winning interest rate of 0.69% per year.
The bills have a term of 28 days from September 21, with the interest rate paid once at the beginning of the period.
This was the first bill issuance by the SBV in more than six months (from March 10). The move is said to be appropriate in the context of excess banking system liquidity.
Newly released data from the SBV showed that credit is still growing very slowly, reaching only 5.56% in the year to September 15, up slightly from a 5.33% increase at the end of August, while the target set for the year is 14%.
In the interbank market, interest rates remain at a very low level. On September 20, the average overnight interest rate was only 0.16% per year and those for terms of one, two and three weeks also decreased to 0.33%, 0.74%, and 0.97%, respectively.
Earlier, the "Big 4" state-owned commercial banks in Vietnam BIDV, Vietcombank, VietinBank and Agribank simultaneously cut interest rates on term deposits by 0.2-0.3 percentage points to 3.5% per year at the lowest and 5.5% at the highest, marking a historic low since the Covid-19 period.
The central bank’s money withdrawal is also said to be related to exchange rate developments in recent days. After this move, U.S dollar prices at commercial banks have cooled significantly. At state-controlled Vietcombank, the price of the USD, after soaring to VND24,550 earlier this week, now stands at VND24,160 for buying and VND24,500 for selling.
The central bank raised its mid-point exchange rate by VND14 to VND24,060 per U.S. dollar on Tuesday, setting a record high. The rate is used as a reference for banks in Vietnam.