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SSI: Credit growth in August will not be too positive

07/09/2021

"The SBV has not announced credit growth in August, but based on the statistics reported by the Statistics Office from Hanoi and Ho Chi Minh City, credit growth in August will not be too positive", SSI Research forecasts.

In the money market report last week (August 30 - September 1), SSI Securities Analysis Division (SSI Research) said that lending interest rates have been adjusted down relatively sharply over the past month with reductions ranged from 0.5% - 3%.

Meanwhile, the deposit interest rate is still maintained at a low level, ranging from 3-4% per annum for terms of less than 6 months, 3.7% - 5.0% per annum for terms of 6 months to 12 months and 4.2% – 6.5% per annum for terms over 12 months.

In another development, open market operations did not generate new transactions in the past week. Interest rate fluctuations are not significant due to the reduced number of trading days. The interbank interest rate level last week decreased slightly by 0.03 percentage points, ending the week at 0.71% per annum  for overnight term and 0.86% per annum for one week term..

According to SSI Research, the additional source of VND money from the maturity of foreign currency purchases by the State Bank (SBV) no longer appeared in the past week.

However, the movement of interbank interest rates still maintained a downward trend for 3 consecutive weeks thanks to abundant liquidity when the epidemic lasted, causing credit growth to slow down.

"The SBV has not announced credit growth in August, but based on the statistics reported by the Statistics Office from Hanoi and Ho Chi Minh City, credit growth in August will not be too positive", SSI Research forecasts.

Also in the report, the analysis team said that this week, the buyback operations of government bonds of the State Treasury will return after nearly 2 quiet months and is expected to partially support market liquidity at the end of the quarter.

Regarding the scale, according to the State Treasury, the trading volume of each session will be announced specifically for each session, and in this quarter alone, the total limit for using temporarily idle state funds to buy back government bonds with term is of VND 54,760 billion. As a result, interbank interest rates are expected to remain stable at low levels in the near future, according to SSI Research.

 

Kylie Nguyen

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