Vietnam central bank likely to withdraw more cash: analyst

By Anh Minh
Sat, September 30, 2023 | 2:43 pm GMT+7

The State Bank of Vietnam (SBV), the country’s central bank, has been issuing treasury bills to reduce excess liquidity in the system and is likely to continue to do so next week, said an analyst at leading broker SSI Securities.

The banking regulator withdrew a combined VND94 trillion ($3.87 billion) in seven consecutive days through Friday via T-bill issuances, according to SBV data.

Outstanding T-bills have hovered at around VND200 trillion ($8.23 billion) recently, meaning that the SBV will continue to auction bills in the coming days, said analyst Thai Viet Trinh.

The T-bills issued in recent days by the SBV may test the liquidity of the whole banking system to gauge proper interest rates in the tier-2 market (between banks and businesses/individual clients), and to avoid upward pressures on rates in the tier-1 (interbank) market, she added.

Transactions at a bank in Hanoi. Photo by Trong Hieu/The Investor.

Transactions at a bank in Hanoi. Photo by Trong Hieu/The Investor.

The SBV bought in around $6 billion in foreign currency in the first half of this year, injecting some VND130 trillion ($5.35 billion) into the system. The regulator is forecast to issue T-bills up to that amount and then assess further reactions, Trinh said.

The analyst commented that issuing T-bills is a better option than selling forex from the SBV’s reserves. This will help the bank regulate interest rates on the tier-2 market to ease pressure on the USD/VND rate and minimize collateral effects on tier-1 market rates.

Other experts share the view that issuing T-bills is a normal maneuver by central banks and does not mean a reversal of monetary policy. In the SBV’s case, it is aimed to curb the weakening of the Vietnamese dong against the U.S. dollar, which is standing by 10-month highs against a basket of major currencies.

Huynh Minh Tuan, CEO of FIDT Research, also forecast the SBV to continue its cash withdrawing streak until its USD/VND rate goal is met or liquidity reaches a certain level.

Speaking at a meeting of the National Assembly’s Economic Committee on Wednesday, SBV Deputy Governor Pham Thanh Ha said the banking regulator’s recent T-bill issuances were aimed at scaling back liquidity in excess while avoiding rate hikes. The bank will manage to balance the management of interest rates and the exchange rate.

Comments (0)
  • Read More
Thailand’s digital ad spending predicted to grow 10% in 2025

Thailand’s digital ad spending predicted to grow 10% in 2025

Thailand’s online advertising spending in 2025 is forecast to grow 10% to THB35 billion (over $1 billion), based on a gradual rebound of the local economy and intense competition in the digital industry, according to the Digital Advertising Association of Thailand (DAAT).

Southeast Asia - Sat, March 29, 2025 | 3:39 pm GMT+7

US Defence Secretary reaffirms alliance commitment during visit to Philippines

US Defence Secretary reaffirms alliance commitment during visit to Philippines

U.S. Secretary of Defence Pete Hegseth reaffirmed Washington’s strong commitment to its alliance with the Philippines during his official visit to the Southeast Asian country on Friday.

Southeast Asia - Sat, March 29, 2025 | 3:32 pm GMT+7

Southern Vietnam province Tra Vinh okays five more wind power projects

Southern Vietnam province Tra Vinh okays five more wind power projects

Vietnam's southern coastal province of Tra Vinh has granted in-principle approvals for five wind power plant projects, with a total investment of over VND 13.8 trillion ($540 million).

Southeast Asia - Sat, March 29, 2025 | 3:29 pm GMT+7

Vietnam, South Africa eye stronger air logistics links

Vietnam, South Africa eye stronger air logistics links

Vietnam and South Africa are seeking to strengthen air logistics cooperation to meet rising trade and transportation demands.

Southeast Asia - Sat, March 29, 2025 | 3:24 pm GMT+7

Net profit of Vietnam-Singapore Industrial Park nearly doubles in 2024

Net profit of Vietnam-Singapore Industrial Park nearly doubles in 2024

Vietnam-Singapore Industrial Park J.V. Co., Ltd, or VSIP, the largest industrial park developer in Vietnam, posted VND3.28 trillion ($128.37 million) in net profit in 2024, up nearly 93% year-on-year.

Industrial real estate - Sat, March 29, 2025 | 3:18 pm GMT+7

Trump Organization eyes golf course, hotel projects in Vietnam

Trump Organization eyes golf course, hotel projects in Vietnam

A consortium between the Trump Organization and its partner in Vietnam plans multiple investments worth billions of dollars in golf courses, hotels and real estate projects Vietnam, Reuters quoted the consortium’s spokesman as saying.

Real Estate - Sat, March 29, 2025 | 11:06 am GMT+7

Livestock major Dabaco invests in 8.2-hectare dry port in northern Vietnam

Livestock major Dabaco invests in 8.2-hectare dry port in northern Vietnam

Vietnam’s leading livestock firm Dabaco has invested in an 8.2-hectare inland container depot (ICD) in Bac Ninh province, an emerging manufacturing hub in northern Vietnam and home to a Samsung Electronics plant.

Infrastructure - Sat, March 29, 2025 | 10:51 am GMT+7

Phuong Tien Minh appointed CEO of life insurer FWD Vietnam

Phuong Tien Minh appointed CEO of life insurer FWD Vietnam

Hong Kong-headquartered FWD Group Holdings Limited has appointed Phuong Tien Minh as CEO of life insurer FWD Vietnam, effective Thursday, March 27.

Finance - Sat, March 29, 2025 | 10:40 am GMT+7

Vietnam's Deputy PM backs formation of free trade zone in Binh Dinh province

Vietnam's Deputy PM backs formation of free trade zone in Binh Dinh province

Vietnam’s Deputy Prime Minister Nguyen Chi Dung on Friday expressed his support for an early study of a free trade zone in Phu My Port area, the south-central province of Binh Dinh.

Economy - Sat, March 29, 2025 | 8:25 am GMT+7

Vietnam offers numerous advantages for Skoda Auto's investment: executive

Vietnam offers numerous advantages for Skoda Auto's investment: executive

Vietnam offers a range of advantages for investment by Czech automaker Skoda Auto, including its seaport system, logistics infrastructure, and skilled labor, the company’s chairman and CEO Klaus Zellmer said on Thursday.

Industries - Fri, March 28, 2025 | 7:33 pm GMT+7

Vietnam plans to cut import tax for LNG to 2%

Vietnam plans to cut import tax for LNG to 2%

Vietnam’s Ministry of Finance is drafting a decree on preferential import tax for some products, including a proposal of 2% tax rate for LNG.

Energy - Fri, March 28, 2025 | 4:31 pm GMT+7

AES’s $2.1 bln LNG power project needs solutions to meet deadline: Vietnam authorities

AES’s $2.1 bln LNG power project needs solutions to meet deadline: Vietnam authorities

The 2,250-MW Son My 2 LNG-fired power project, invested by the U.S.'s AES and state-run Petrovietnam subsidiary PV Gas, “needs solutions” to meet its deadline.

Energy - Fri, March 28, 2025 | 4:06 pm GMT+7

Over $9 bln pledged for investment projects in central Vietnam province Binh Dinh

Over $9 bln pledged for investment projects in central Vietnam province Binh Dinh

Binh Dinh province on Friday handed over MoUs on investment cooperation, in-principle approvals and investment registration certificates to 62 projects worth over VND231 trillion ($9.03 billion).

Industries - Fri, March 28, 2025 | 4:05 pm GMT+7

Vietnam's giant Vingroup eyes mullti-billion-dollar renewable, LNG power projects

Vietnam's giant Vingroup eyes mullti-billion-dollar renewable, LNG power projects

Vietnam's leading private conglomerate Vingroup is seeking the government's permission to develop seven renewable energy projects worth $20-25 billion and a $5.5 billion LNG-fired power project from 2025-2030.

Energy - Fri, March 28, 2025 | 1:09 pm GMT+7

While the buzz around a market upgrade is back, who is this milestone for?

While the buzz around a market upgrade is back, who is this milestone for?

A key issue for the Vietnamese stock market is the underdevelopment of the institutional investor base. The dominance of retail investors can create heightened volatility, which, in turn, reduces the incentive for high-quality companies to list on the stock exchange, writes Gary Harron, head of securities services at HSBC Vietnam.

Consulting - Fri, March 28, 2025 | 10:31 am GMT+7

Vietnam's private lender VIB seeks strategic shareholders: chairman

Vietnam's private lender VIB seeks strategic shareholders: chairman

Vietnam International Bank's (VIB) board of directors is now in discussions with banks and investment funds to find suitable partners for the lender, ensuring a mutually beneficial partnership that goes beyond finance.

Banking - Fri, March 28, 2025 | 8:31 am GMT+7