HCMC – The State Bank of Vietnam (SBV) withdrew a net amount of VND57.6 trillion from the market to keep liquidity in the banking system scantly sufficient, which is an apparent move to buoy interest rates.

According to SSI Securities Company, the SBV, the nation's central bank, made net withdrawals of VND34.6 trillion via open market operations and VND23 trillion via forex interventions. Moreover, the central bank issued T-bills worth VND73.8 trillion with a seven-day term, up 65.6% over last week. During the first four days of the week, the T-bill coupon increased 50 basis points to 4.5% before rising further to 5% in the last transaction of the week. According to SSI, the SBV will cap liquidity to keep the dong's interbank interest rate at 5-5.5%. Last week, the SBV raised its key interest rates to the March 2020 levels, but they are still 50 basis points lower than the pre-pandemic levels. On September 27, the short-term deposit rates of commercial banks with the State holding a majority stake were also adjusted. For example, Vietcombank and Vietinbank increased their deposit interest rate of one to three-month terms to 4.1% instead of 3.1% annually. VCBS Securities Company reported that interest rates would rise by 150 to 200 basis points due to the SBV interest rate hike.