The central bank injected amounts over VND11 trillion on February 3 and VND24.67 trillion on February 4.

In the latest session on February 4, through the open market operations (OMO) channel, the SBV provided loans to seven financial institutions, totalling over VND10 trillion at an interest rate of 4% per annum for a seven-day term.

Another 12 institutions borrowed VND20 trillion at the same interest rate for a 14-day term. With VND9.25 trillion maturing on the same day, the net injection via this channel amounted to VND21 trillion.

In the treasury bill (T-bill) market, the SBV also issued an additional VND900 billion worth of T-bills with a seven-day maturity at an interest rate of 4% per annum, with two institutions winning the bids. Meanwhile, VND4.55 trillion worth of T-bills matured, resulting in a net injection of VND3.65 trillion.

As of February 4, the total outstanding T-bills in circulation stood at VND24 trillion, while the OMO balance exceeded VND163.5 trillion.

The central bank’s liquidity injections come as interbank interest rates surged in recent sessions. According to the latest data from the SBV, the overnight interbank lending rate on February 3 — the first trading day of the Lunar New Year — stood at 4.75% per annum, an increase of 0.83 percentage points compared to the final session before the holiday on January 24.

Financial market summary

According to the New York branch of the US Federal Reserve, the spread between the US secured overnight financing rate and Vietnam’s overnight interbank rate currently stands at 0.4 percentage points.

Interest rates for one-week, two-week and three-month tenors have also increased slightly since January 24, reaching 4.98%, 5% and 5.75%, respectively.

In the foreign exchange market, the USD/VND interbank exchange rate closed at 25,085 before the Lunar New Year holiday. Ongoing US-China trade tensions could influence market movements this week. Asia Commercial Bank forecasts that the USD/VND exchange rate may rise to 25,400 in the first half of February.

Meanwhile, United Overseas Bank (UOB) expects continued pressure on the Vietnamese dong due to US tariff policies and movements in the Chinese yuan, predicting the exchange rate could reach 25,800 in Q1 and 26,200 in Q3 of 2025.

UOB assesses that the need for monetary easing to support economic growth is no longer urgent. Throughout 2024, the SBV maintained a low-interest-rate environment, primarily intervening through OMO and T-bill issuance to ensure liquidity. The likelihood of the SBV raising its policy rates remains very low.

Fed’s foreseen rate cuts affect foreign exchange rate

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