Latest topics
Vietnam - Central bank to keep pumping funds via OMO
Page 1 of 1
Vietnam - Central bank to keep pumping funds via OMO
October 6, 2011
Central bank to keep pumping funds via OMO
The central bank’s move to continuing injecting capital via open market operations (OMO) last week has partly removed concerns over liquidity among small banks that are set to lose big customers to larger lenders when Circular 30 comes into effect.
Circular 30 issued by the State Bank of Vietnam (SBV) rules that a maximum interest rate of no more than 6% a year for call deposits or deposits in Vietnam dong with terms less than a month will be effective from Saturday.
Last week was the second successive week SBV has pumped a huge amount of money into the open market via five sessions with total value of VND6 trillion, comprising VND2 trillion as refinancing loans aimed at state-owned lenders when their existing loans mature.
From September 19 to 23, the central bank injected over VND4 trillion and withdrew VND3 trillion. The open market saw the registration value fall by 26% compared to the previous week to VND37 trillion and the bid value reached VND27 trillion.
Notably, SBV last week didn’t withdraw money via the open market as usual since the lending term was adjusted from one week to two weeks.
Over the past four weeks, the central bank has pumped VND29 trillion through OMO with annual interest rates at 14% as a determination to cool down interest rates and support commercial banks to improve liquidity.
Currently, the overnight inter-bank rate stays at 12.5%-13%. The one week term swings 13% either way while the two week term ranges between 13%-14% and one month term mostly maintains at 13%-14.5% annually.
However, the inter-bank rate last Thursday sharply increased, seeing one month term rising to 16% and later inching up to 15.6% last weekend.
Observers said Vietnam dong liquidity of the banking system is being secured and the inter-bank rate might be stable in the coming days. The problem is that the demand for dong borrowing may not decrease this month as a number of recapitalizations come to maturity.
BaoViet Securities said that the central bank next week would likely withdraw around VND27 trillion and continue to inject money into the open market in an effort to ensure the banking system remains liquid.
According to some lenders in HCMC, dong mobilization has gone down slightly but liquidity in Vietnam dong has stayed stable. Annual lending rates for agriculture, rural areas and export are recorded at 17%-19%, for production and business at 18%-21% and for non-productive industries at 22%-25% per year.
It is forecast that lending rates will hover around 17%-19% in the fourth quarter this year. This means that local firms still have difficulty accessing banking loans in Vietnam dong and they have to keep borrowing the U.S. dollar instead, resulting in pressure on Vietnam dong depreciation towards the year-end.
http://www.vietfinancenews.com/2011/10/central-bank-to-keep-pumping-funds-via.html#more
Central bank to keep pumping funds via OMO
The central bank’s move to continuing injecting capital via open market operations (OMO) last week has partly removed concerns over liquidity among small banks that are set to lose big customers to larger lenders when Circular 30 comes into effect.
Circular 30 issued by the State Bank of Vietnam (SBV) rules that a maximum interest rate of no more than 6% a year for call deposits or deposits in Vietnam dong with terms less than a month will be effective from Saturday.
Last week was the second successive week SBV has pumped a huge amount of money into the open market via five sessions with total value of VND6 trillion, comprising VND2 trillion as refinancing loans aimed at state-owned lenders when their existing loans mature.
From September 19 to 23, the central bank injected over VND4 trillion and withdrew VND3 trillion. The open market saw the registration value fall by 26% compared to the previous week to VND37 trillion and the bid value reached VND27 trillion.
Notably, SBV last week didn’t withdraw money via the open market as usual since the lending term was adjusted from one week to two weeks.
Over the past four weeks, the central bank has pumped VND29 trillion through OMO with annual interest rates at 14% as a determination to cool down interest rates and support commercial banks to improve liquidity.
Currently, the overnight inter-bank rate stays at 12.5%-13%. The one week term swings 13% either way while the two week term ranges between 13%-14% and one month term mostly maintains at 13%-14.5% annually.
However, the inter-bank rate last Thursday sharply increased, seeing one month term rising to 16% and later inching up to 15.6% last weekend.
Observers said Vietnam dong liquidity of the banking system is being secured and the inter-bank rate might be stable in the coming days. The problem is that the demand for dong borrowing may not decrease this month as a number of recapitalizations come to maturity.
BaoViet Securities said that the central bank next week would likely withdraw around VND27 trillion and continue to inject money into the open market in an effort to ensure the banking system remains liquid.
According to some lenders in HCMC, dong mobilization has gone down slightly but liquidity in Vietnam dong has stayed stable. Annual lending rates for agriculture, rural areas and export are recorded at 17%-19%, for production and business at 18%-21% and for non-productive industries at 22%-25% per year.
It is forecast that lending rates will hover around 17%-19% in the fourth quarter this year. This means that local firms still have difficulty accessing banking loans in Vietnam dong and they have to keep borrowing the U.S. dollar instead, resulting in pressure on Vietnam dong depreciation towards the year-end.
http://www.vietfinancenews.com/2011/10/central-bank-to-keep-pumping-funds-via.html#more
*****************
"WHEN THE POWER OF LOVE OVERCOMES THE LOVE OF POWER, THE WORLD WILL KNOW PEACE"
lexie- Elite Member
- Posts : 1812
Join date : 2011-06-24
Page 1 of 1
Permissions in this forum:
You cannot reply to topics in this forum
Yesterday at 6:02 am by Ditartyn
» Dave Schmidt - Zim Notes for Purchase (NOT PHYSICAL NOTES)
Sat Mar 23, 2024 9:25 am by swizzlestick
» ZIGPLACE
Wed Mar 20, 2024 6:29 am by Zig
» CBD Vape Cartridges
Thu Mar 07, 2024 2:10 pm by Arendac
» Classic Tony is back
Tue Mar 05, 2024 2:53 pm by Mission1st
» THE MUSINGS OF A MADMAN
Mon Mar 04, 2024 11:40 am by Arendac
» Minister of Transport: We do not have authority over any airport in Iraq
Mon Mar 04, 2024 11:40 am by Verina
» Did Okie Die?
Mon Mar 04, 2024 11:34 am by Arendac
» Hello all, I’m new
Wed Jan 31, 2024 8:46 pm by Jonny_5
» The Renfrows: Prophets for Profits, Happy Anniversary!
Wed Jan 31, 2024 6:46 pm by Mission1st
» What Happens when Cancer is treated with Cannabis? VIDEO
Wed Jan 31, 2024 8:58 am by MadisonParrish
» An Awesome talk between Tucker and Russell Brand
Wed Jan 31, 2024 12:16 am by kenlej
» Trafficking in children
Mon Jan 29, 2024 7:43 pm by kenlej
» The second American Revolution has begun, God Bless Texas
Mon Jan 29, 2024 6:13 pm by kenlej
» The Global Currency Reset Evolution Event Will Begin With Gold, Zimbabwe ZWR Old Bank Notes
Sun Jan 28, 2024 3:28 pm by Mission1st
» Tucker talking Canada
Wed Jan 24, 2024 6:50 pm by kenlej
» Almost to the end The goodguys are winning
Mon Jan 22, 2024 9:03 pm by kenlej
» Dinar Daily Facebook Page
Mon Jan 22, 2024 3:34 pm by Ponee
» The Fundamentals of Finance and Pimpy Live
Thu Jan 18, 2024 7:17 am by Dinarhater
» Why Won't the Iraqi Dinar Scam Die?
Wed Jan 17, 2024 5:19 pm by RamblerNash