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Credit demand will gradually recover towards the end of the year

04/08/2021

According to SSI Research, in the base scenario, if the pandemic is well controlled in August, credit demand will gradually recover towards the end of the year.

According to the newly published money market report, SSI Securities Analysis Division is of the opinion that in the week from July 26 to July 30, there were no new transactions in the open market and foreign currency forward contracts continued to be executed to help improve the local currency supply.
Interbank interest rates last week decreased by 0.48 to 0.52 percentage points, ending the week at 0.97% p.a. for overnight term and 1.18% p.a. for one-week term.

Generally for July, the interbank interest rate level was almost flat, at 1.01% p.a. for overnight term, slightly down from 1.21% p.a. in June.
SSI Research expects interbank interest rates to continue to fall next week, in the context of weak credit demand due to prolonged social distancing and local currency sources from mature foreign currency sales contracts.

“In the base scenario, if the pandemic is well controlled in August, credit demand will gradually recover towards the end of the year. The lending interest rate level will be flat while the deposit interest rate will increase slightly on average by about 0.5 percentage points”, according to the analysis team..

In the foreign exchange market, the movement of the USD in the international market and the stable supply and demand of foreign currencies in the country helped the listed exchange rates of commercial banks decrease by up to 60 dong/USD in both directions, ending the week of buying and selling at 22,820 - 23,050. The free-market exchange rate decreased by 80 dong on the buying side and 70 dong on the selling side, closing the week at 23,120 - 23,180.

Thus, VND has increased by 0.27% against USD in July and has gained a total of 0.65% against USD in the first seven months of the year. SSI Research believes that the USD/VND exchange rate will move sideways in the short term and may decrease slightly towards the end of the year due to the improved balance of payments.

 

Kylie Nguyen

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