Vietnam central bank may continue cash withdrawal to keep forex rate stable

By Anh Minh
Wed, September 27, 2023 | 10:42 pm GMT+7

The State Bank of Vietnam (SBV), the country’s central bank, is expected to continue withdrawing cash from the banking system through open market operations (OMO) in order to narrow the dong-dollar interest rate gap and keep the USD/VND rate stable, analysts have said.

The SBV on Wednesday sold VND20 trillion ($816 million) worth of 28-day treasury bills, with a winning rate of 0.65% per annum, higher than the 0.58% on Tuesday and 0.49% on Monday.

The banking regulator has withdrawn a total of nearly VND70 trillion ($2.87 billion) over the past five days, all by selling 28-day bills.

State Bank of Vietnam headquarters in Hanoi. Photo by The Investor/Trong Hieu.

State Bank of Vietnam headquarters in Hanoi. Photo by The Investor/Trong Hieu.

The consecutive withdrawals are aimed to regulate liquidity on the tier-2 (interbank) market in order to ease speculative pressure in the short term. Meanwhile, the volume has been moderate to avoid liquidity constraints in the tier-2 market and minimize upward pressure on tier-1 (between banks and businesses/individual clients) interest rates, according to analysts.

Researchers at FIDT, an investment advisory and asset management firm in Ho Chi Minh City, said the withdrawals are meant to balance the labor market and inflation, while supporting economic growth.

The SBV is trying to keep the USD/VND at around VND24,500 by raising short-term interest rates to dampen forex rate speculation. Selling SBV-bills is a wise move, FIDT researchers commented.

They predicted the SBV to pull out up to VND100 trillion ($4.1 billion) within two weeks, leaving excess liquidity at between VND40 trillion and VND70 trillion ($2.87 billion), equivalent to the required reserves across the whole banking system.

Analysts at Viet Dragon Securities Co. (VDSC) said the recent successful SBV-bill issuances and low interbank rates signaled excess liquidity in the system.

With an interest rate gap between USD- and VND-denominated loans of less-than-one-month terms hovering around four or five percentage points, carry trade operations are expected to continue as the U.S. Federal Reserve (Fed) is set to further monetary tightening, they said.

The recent bill sales after the latest Fed policy meeting are meant to discourage carry trade and ease the pressure on the USD/VND rate.

The SBV may continue cash withdrawals but it does not mean a reversal in its monetary policy, VDSC analysts said.

The SBV on Wednesday raised its mid-point exchange rate by VND4 from a day earlier to VND24,088 per U.S. dollar. Meanwhile, prices of the greenback at a number of commercial banks dropped by VND15-20.

Comments (0)
  • Read More
Vietnam's benchmark VN-Index could surpass 2,000 points in 2026: exec

Vietnam's benchmark VN-Index could surpass 2,000 points in 2026: exec

VN-Index could top 2,000 points next year, said Huynh Minh Tuan, founder of FIDT - a Ho Chi Minh City-based investment consulting firm.

Finance - Thu, October 23, 2025 | 10:55 am GMT+7

Key factors helping firms export to demanding markets: DH Foods exec

Key factors helping firms export to demanding markets: DH Foods exec

Don’t treat business as a week-to-week or month-to-month affair. To go the distance, you must conduct business ethically, writes Nguyen Trung Dung, CEO of DH Foods.

Consulting - Thu, October 23, 2025 | 8:00 am GMT+7

Gold exchange, gold derivatives, gold ETFs proposed to be launched in Vietnam

Gold exchange, gold derivatives, gold ETFs proposed to be launched in Vietnam

Forming a gold exchange under state management in Vietnam is suitable to the reality, said Dao Xuan Tuan, head of the foreign exchange management department under the State Bank of Vietnam (SBV).

Finance - Wed, October 22, 2025 | 9:00 pm GMT+7

Real estate major Novaland wins key approval for $5 bln project in central Vietnam

Real estate major Novaland wins key approval for $5 bln project in central Vietnam

Novaland Group (HoSE: NVL), one of Vietnam’s leading property developers, has received investment approval for its flagship project worth $5 billion in the central province of Lam Dong after years of delay due to legal obstacles.

Real Estate - Wed, October 22, 2025 | 4:20 pm GMT+7

Vietnam's plastics heavyweights Tien Phong, Binh Minh report profit surges

Vietnam's plastics heavyweights Tien Phong, Binh Minh report profit surges

Tien Phong Plastic (HNX: NTP) recorded pre-tax profit of nearly VND949 billion ($36.04 million) in the first nine months of the year, exceeding its full-year target by 10.85%, while Binh Minh Plastic (HoSE: BMP) achieved record net profit of VND350 billion ($13.29 million) in Q3, surpassing its VND330 billion milestone set in the previous quarter.

Companies - Wed, October 22, 2025 | 4:17 pm GMT+7

Vietnam, Finland firms sign multiple MoUs on satellite, cybersecurity, aviation partnerships

Vietnam, Finland firms sign multiple MoUs on satellite, cybersecurity, aviation partnerships

A series of cooperation agreements were signed between Vietnam and Finland on Tuesday, within the framework of Party chief To Lam's official visit to Helsinki, while bilateral relationship was lifted to a "strategic partnership".

Economy - Wed, October 22, 2025 | 12:43 pm GMT+7

Trung Nam Ca Na seeks to convert agri-forest land for $147 mln industrial park in central Vietnam

Trung Nam Ca Na seeks to convert agri-forest land for $147 mln industrial park in central Vietnam

Industrial park developer Trung Nam Ca Na is seeking approval to convert about 170 hectares of agricultural and forest land for the construction of a VND3,875 billion ($147 million) project in Vietnam’s central coastal province of Khanh Hoa.

Industrial real estate - Wed, October 22, 2025 | 10:54 am GMT+7

PV Power's arm posts 5-fold jump in Q3 profit on margin recovery

PV Power's arm posts 5-fold jump in Q3 profit on margin recovery

PetroVietnam Power Nhon Trach 2 JSC (HoSE: NT2) reported a sharp rebound in third-quarter earnings as improved margins and higher revenue lifted profits nearly fivefold from a year earlier.

Companies - Wed, October 22, 2025 | 8:37 am GMT+7

TCBS overtakes SSI to become Vietnam’s largest securities company by market cap

TCBS overtakes SSI to become Vietnam’s largest securities company by market cap

Over 2.3 billion shares of Techcom Securities JSC (TCBS) debuted on the Ho Chi Minh City Stock Exchange (HoSE) on Tuesday. The stock, TCX, recorded the highest price and the largest market capitalization in the Vietnamese securities sector.

Finance - Tue, October 21, 2025 | 10:27 pm GMT+7

Indonesia’s palm oil industry becomes investment magnet

Indonesia’s palm oil industry becomes investment magnet

Indonesia’s palm oil sector attracted IDR52.7 trillion, or approximately $3.2 billion, in investment during the first nine months of this year, with the money going into enabling the country to capture more value out of its top commodity, the country’s Ministry of Investment reported.

Southeast Asia - Tue, October 21, 2025 | 9:34 pm GMT+7

Indonesia reports strong job, investment growth

Indonesia reports strong job, investment growth

The Indonesian Coordinating Ministry for Economic Affairs reported strong job and investment growth during the first year of President Prabowo Subianto’s administration, compared with the first year under his predecessor.

Southeast Asia - Tue, October 21, 2025 | 9:29 pm GMT+7

Singapore grants conditional approval for 1GW low-carbon power import from Malaysia

Singapore grants conditional approval for 1GW low-carbon power import from Malaysia

Singapore has granted conditional approval to import 1 GW of low-carbon electricity from the Malaysian state of Sarawak, marking a new phase in the energy partnership between the two countries.

Southeast Asia - Tue, October 21, 2025 | 9:26 pm GMT+7

Margin lending in Vietnam’s stock market hits record, but not worrisome

Margin lending in Vietnam’s stock market hits record, but not worrisome

Despite margin debt in Vietnam’s stock market surging sharply, experts believe that current margin pressure is not yet a major concern as top securities firms have significantly strengthened their capital buffers.

Finance - Tue, October 21, 2025 | 4:23 pm GMT+7

Lenders in Vietnam now in low-rate lending race: ACB exec

Lenders in Vietnam now in low-rate lending race: ACB exec

The biggest “headache” for banks in Vietnam now is that profit margins are getting thinner, said CEO of Asia Commercial Bank (ACB) Tu Tien Phat.

Banking & Finance - Tue, October 21, 2025 | 4:00 pm GMT+7

PV Gas - 35 years of innovation and technological leadership in Vietnam’s gas industry

PV Gas - 35 years of innovation and technological leadership in Vietnam’s gas industry

Over the past 35 years of establishment and development (1990-2025), PV Gas, a subsidiary of state-owned giant Petrovietnam, has affirmed its pioneering position in Vietnam’s gas industry, marked by a series of groundbreaking achievements in science and technology.

Companies - Tue, October 21, 2025 | 3:45 pm GMT+7

Vietnam's consumer finance major F88 achieves 90% of year's profit target after 9 months

Vietnam's consumer finance major F88 achieves 90% of year's profit target after 9 months

F88 Investment JSC (F88), a leading consumer finance company in Vietnam, reported a cumulative pre-tax profit of VND603 billion ($22.88 million) in the first nine months of 2025, a 2.5-fold increase year-on-year, reaching 90% of its full-year target of VND673 billion.

Companies - Tue, October 21, 2025 | 3:15 pm GMT+7