Inter-bank Dong, Dollar Trading Up On Higher Demand

The State Bank of Vietnam, the country’s central bank, said Monday that the total trading value of dong on inter-bank market in the week ended Dec 17 rose by VND8.51 trillion from the previous week to VND24.07 trillion while that of U.S. dollar was also up US$580 million to US$2.03 billion.

 

Overnight and one-week term trading value accounted for the majority of total trading turnover in the Vietnamese dong, in which the one-week loans were VND55.29 trillion, making up for 46%, the central bank said in a statement.

 

The turnover of dong and U.S. dollar was respectively averaged VND24.07 trillion and US$406 million a day, compared to VND22.37 trillion and US$290 million in the previous week.

 

The central bank also reported that the average inter-bank lending interest rate of the dong soared by 0.25-1.08 percentage point to surpass the 10% mark per annum. The highest lending rate was recorded at 12% per annum and the lowest at 5%.

 

Average overnight interest rate was 10.71%, up 0.66 percentage points from the previous week. Lending rates for other terms were above 11.3% per annum with the highest rate of 11.66% per annum offered to one-week term.

 

The lending rate of U.S. dollar was down for short-term loans but in uptrend for long term ones. Overnight rate was 0.85% per annum, down 0.09 percentage point from the previous week while rates for other terms ranged between 1.53% and 3.82% per annum.

 

Last week, short-term lending rates in dong have risen strongly and are expected to stay high, supported by robust corporate demand to settle year-end payments.

 

Year-end demand for funds in Vietnam is normally pushed up by corporate debt repayments, bonuses and consumer spending. (SBV)