According to the analysis centre of Saigon Securities Incorporation (SSI Research), last week, no new transactions were made in the Open Market Operations (OMO) and there was no volume of bills in circulation on this channel. The liquidity of the system was somewhat more stable, and the interbank interest rates on the overnight term dropped by 0.02 percentage point when closing the last session of the week, reaching 1.13 percent per annum.
In contrast, the long-term interest rates tended to increase by 0.4 0.08 percentage points, reflecting the expectation that the interbank interest rates will increase in the near future, when the market enters the peak period before the Lunar New Year.
The credit growth continued to record a relatively strong growth in the last days of December, as information from the State Bank of Vietnam (SBV) showed that by the end of December, credit reached 10,400 trillion dong, up by 13.5 percent compared to the end of 2020.
Thus, similar to the situation at the end of 2020, credit accelerated in the end of 2021when in December alone, commercial banks lent an additional 253 trillion dong, up by 38 percent compared to the total level of new credit in November.
In 2022, the credit growth is expected at 14 percent and the SBV will continue to pursue an easing monetary policy, focusing on the interest rate support package and the target of cutting lending interest rates by at least 0.5 percent to one percent in two years.
However, the SBV’s orientation of capital flows from credit institutions will prioritise production and business sectors; difficult areas due to the epidemic such as tourism, transportation, accommodation, etc. Meanwhile, the capital flows into real estate, corporate bonds, securities, etc. will be strictly controlled, even tighter than in 2021.
In the foreign currency market, the US dollar/dong exchange rate listed at commercial banks barely recorded changes compared to the previous week, closing the week at 22,540 22,850 dong per US dollar (buying selling), down by 20 dong. In contrast, the exchange rate in the free market continued to increase slightly by 30 dong, closing the week at 23,520 23,550 dong per US dollar.
According to the SSI Research, the gap between the exchange rates listed at commercial banks and the free market continued to widen, when the difference between the domestic and international gold prices remained high. Basically, the dong still showed its strength through the positive supply of foreign currency into Vietnam. The trade balance is estimated to have a surplus of about 4.1 billion US dollars in 2021, while the Foreign Direct Investment (FDI) disbursement reached 19.7 billion US dollars.
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