Macro Report

Last week, the central bank continued to withdraw a net amount of VND 5 tn via open market operations. No bills were issued or went expired. At the same time, VND 14 tn was lent out via 7-day reverse repo transactions at 4.75% p.a., while VND 19 tn of reverse repo contracts expired. Interbank interest rates closed out the week at 3.98% p.a at -18 bps WoW for the overnight tenure, and at 4.05% p.a. at -25 bps WoW for the one-week tenure. Sustained demand continued to be the defining feature of the primary bond market. The VST was the sole issuer in the market, originally offering a total of VND 6.5 tn of bonds. VND 1 tn will be offered for the 5Y tenure, with VND 2 tn for the 10Y tenure, VND 3 tn for the 15Y tenure and VND 500 bn for the 20Y tenure. VND 1 tn of the 10Y tenure and VND 1.5 tn of the 15Y tenure was then added to the offering thereafter.

Last week, the central bank continued to withdraw a net amount of VND 9.7 tn via open market operations. No bills were issued or went expired. At the same time, VND 19 tn was lent out via 7-day reverse repo transactions at 4.75% p.a., while VND 28.7 tn of reverse repo contracts expired. Liquidity in the banking system was squeezed, which drove up interbank interest rates and closed out the week at 4.15% p.a, at +18 bps WoW for the overnight tenure, and at 4.30% p.a. at +17 bps WoW for the one-week tenure.

Last week, the central bank continued to withdraw a net amount of VND 72.4 tn via open market operations. No bills were issued or went expired. At the same time, VND 28.7 tn was lent out via 7-day reverse repo transactions at 4.75% p.a. VND 101 tn of reverse repo contracts expired during this time. Despite the net OMO withdrawal, liquidity in the banking system continued to improve, driving down interbank interest rates. Interbank rates closed out the week at 3.94% p.a, at -55 bps WoW for the overnight tenure, and at 4.13% p.a. at -51 bps WoW for the one-week tenure.

Liquidity improvement in the banking system after the Tet holiday drove down interbank interest rates. Interbank rates closed out the week at 4.52% p.a, at -38 bps WoW for the overnight tenure, and at 4.64% p.a. at -41 bps WoW for the one-week tenure. The central bank net withdrew VND 51.6 tn via open market operations. No bills were issued or went expired. At the same time, VND 13.8 tn was lent out via 7-day reverse repo transactions at 4.75% p.a., while VND 65.4 tn of reverse repo contracts expired.

During the last week before Tet holiday, despite a huge net injection of liquidity derived from both OMO operations and forex purchases from the central bank, demand for liquidity in the banking system increased in the week before the Tet holiday. Interbank rates picked up, closing out the week at 4.90% p.a at +90 bps WoW for the overnight tenure, and at 5.05% p.a. at +75 bps WoW for the one-week tenure. The central bank net injected VND 52.3 tn via open market operations. No bills were issued or went expired. At the same time, VND 20.2 tn was lent out via 21-day reverse repo transactions at 4.75% p.a, and VND 32 tn was lent out via 14-day reverse repo transactions at 4.75% p.a. Meanwhile, no reverse repo contracts expired.

Last week, the central bank continued its USD purchase wave, and continued to inject large amounts of liquidity via VND into the banking system. Interbank rates therefore continued to dip, closing out the week at 4.20% p.a at -43 bps WoW for the overnight tenure, and at 4.45% p.a. at -28 bps WoW for the one-week tenure. The central bank net injected VND 5 tn via open market operations. No bills were issued or went expired. At the same time, VND 52.82 tn was lent out via 7-day reverse repo transactions at 4.75% p.a, while VND 47.85 tn of reverse repo contracts expired.

Last week, the central bank bought a large amount of USD ($700 mn bought within only the first 3 days of the week), and hence injected a large amount of VND liquidity into the banking system. Interbank rates therefore continued to dip, closing out the week at 4.63% p.a at -17 bps WoW for overnight tenures, and at 4.73% p.a. at -12 bps WoW for the one-week tenure. The central bank net withdrew VND 12.8 tn via open market operations. No bills were issued or went expired. At the same time, VND 39.9 tn was lent out via 7-day reverse repo transactions at 4.75% p.a, while VND 52.66 tn of reverse repo contracts expired.

Last week, interbank rates cooled down after banks met their reserve requirement as of the end of last month. Interest rates closed out the week at 4.80% p.a at -20 bps WoW for the overnight tenure, and at 4.85% p.a. at -15 bps WoW for the one-week tenure. The central bank net withdrew a large amount of VND 46.78 tn via open market operations. No bills were issued or went expired. At the same time, VND 30.64 tn was lent out via 7-day reverse repo transactions at 4.75% p.a, while VND 77.42 tn of reverse repo contracts expired.

Last week, demand of banks for liquidity rose sharply by the end of the year. The central bank supported the market by net injecting an amount of VND 27.63 tn via open market operations. No bills were issued, while VND 3 tn of bills went expired. At the same time, VND 77.42 tn was lent out via 7-day reverse repo transactions at 4.75% p.a, while VND 52.8 tn of reverse repo contracts expired. Despite the support from the central bank, interbank rates soared up, closing out the week at 5.00% p.a at +32 bps WoW for the overnight tenure, and with 5.00% p.a. at +3 bps WoW for the one-week tenure.

Last week, the interbank market remained calm thanks to liquidity support from the central bank. The central bank net injected an amount of VND 18.73 tn via open market operations. No bills were issued, while VND 26 tn of bills went expired. At the same time, VND 52.8 tn was lent out via 7-day reverse repo transactions at 4.75% p.a, while VND 60 tn of reverse repo contracts expired. Interbank rates closed out the week at 4.68% p.a at -1 bps WoW for the overnight tenure, and with 4.78% p.a. at +3 bps WoW for the one-week tenure.