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SSI Research: no upward pressure on interest rates in the short term


According to SSI Research, the increase of the CPI is at the lowest level in five years, the interest rate level has not had any upward pressure in the short term.

In a recent money market report, experts of SSI Securities JSC are of the opinion that Interbank interest rates have increased but the increase is not significant.

Specifically, in the week of May 24 - May 28, 2021, the interbank interest rate was higher than at the end of April, inching up 0.03 - 0.09 percentage points, closing the week at 1.36 % per annum for overnight term and 1.44% per annum for 1-week term.

According to SSI Research, the domestic money supply of commercial banks is more limited than in the previous period, but the supply and demand in the interbank is not to the point of tension. In the past three months, the State Bank of Vietnam (SBV) has still stopped trading on the open market.

Besides, deposit interest rates remained unchanged at most commercial banks. However, some banks still adjusted to increase or decrease interest rates, including: SHB (up 0.1 - 0.3 percentage points), VP bank and HD bank both decreased by 0.3 - 0.7 points.

On the other hand, the CPI in May only increased slightly by 0.16% compared to the previous month, the average of five months only increased by 1.29%, the lowest increase in the last five years.

Therefore, SSI experts see that there is no upward pressures on interest rates in the short term, but they maintain their forecast that interest rates may move upward from the beginning of the third quarter of 2021.

In the foreign exchange market, the listed USD/VND exchange rate of commercial banks decreased by 10 VND/USD to 22,910 - 23,140 VND/USD and continued to decrease by 60 VND/USD in the free market, to 23,170 - 23,220 VND/USD.

According to SSI Research, the VND-USD interest rate gap is maintaining at a high level, but  foreign currency supply and demand in the country is still quite balanced. Therefore, the USD/VND exchange rate is forecast to keep a sideways trend in the short term.

According to information from the General Statistics Office, the trade balance in May continued to have a deficit of USD 2 billion, accumulated over the five months, the deficit was about USD 370 million.

SSI Research also noted that the outbreak of the COVID-19 in Vietnam may prolong this trend and put certain pressure on the exchange rate in the near future.


Kylie Nguyen

© 2019 Vietnam Bank for Agriculture and Rural Development No. 2 Lang Ha street, Ba Dinh district, Hanoi, Vietnam
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