Following the trend shown since the end of December, the market channel opened yesterday (January 7, 2020) still suspended when there were no new transactions.
Specifically, the State Bank still offered VND 3,000 billion on the mortgage channel with the 14-day term and an interest rate of 4.0%, however, there was no winning volume.
As such, there is no volume circulating on the mortgage channel. The operator also did not offer treasury bills.
However, according to experts, a small amount of VND was still pumped out through the sale of USD to the State Bank because, by the end of the day, the interbank exchange rate decreased by 4 VND compared to the previous session and stopped at 23,174 USD/VND, below the spot buying rate listed by the State Bank.
Previously, in the whole year of 2019, the State Bank bought in 20 billion USD, equivalent to 500 trillion VND, bringing the foreign exchange reserve to nearly 80 billion USD, doubling compared to the end of 2016, consolidating the buffer to cope with external fluctuations.
It also reflects the activity of continuing to buy foreign currencies, although the time is close to the Lunar New Year, the liquidity on the system is quite stable.
Yesterday, the average interbank interest rate of VND decreased by 0.06 - 0.40 percentage points for all terms of 1 month or less compared to the first session of the week. Overnight trading was at 1.41%; the 1-week term was at 2.04%; the 2-week term was at 2.89% and the 1-month term was at 3.63%. The difference between the interbank interest rates of VND and USD turned negative when the average USD interest rates did not change at all terms and overnight trading was at 1.77%; the 1-week term was at 1.85%; the 2-week term was at 1.93%, the 1-month term was at 2.07%.
The team here recorded a 30-50 basis point decline for a period of more than 6 months at a number of small commercial banks, narrowing the gap with the remaining commercial banks.
Currently, the mobilizing interest rates are in the range of 4.1-5.0%/year with terms of less than 6 months, 5.3-7.4%/year with terms of 6 to less than 12 months and 6.4-7.5%/year with a term of 12, 13 months.
By 2020, deposit rates are likely to continue to fall based on two platforms: liquidity of the banking system and direction from the Government. Commodity prices and the foreign exchange market are variables that can accelerate or slow down interest rates.
"The reduction of interest rates in the long term will still have gaps among the banking groups because the orientation of reducing the proportion of short-term mobilized capital for medium and long-term loans will be nearly 3 years before the end. The recent evidence shows that the control of small banks has been effective, thereby limiting the interest rate race in the future, " the SSI report stated.
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