|At SBV headquarters__Photo: VNA|
The State Bank of Vietnam on September 27 continued to offer 28-day treasury bills worth VND 20 trillion (USD 833 million ) through an auction.
As a result, nine out of 12 participants won the bid at an interest rate of 0.65 percent, higher than the 0.58 percent on the previous day and 0.49 percent in the beginning of the week.
It was the fifth consecutive issuance of bills by the SBV, bringing the total value to nearly 70 trillion VND. These bills all have a 28-day maturity period and were offered via interest rate auction. The number of participants ranged from 11-17.
MayBank Securities believed that the central bank’s money withdrawal from the system via bill issuance is a measure to ease exchange rate pressure, bringing it to the target of /-3 percent set for this year. In August and September, the exchange rate increased rapidly and showed signs of exceeding the target.
"This is a careful calculation given the system's excess liquidity and a wise step as it does not need to sell foreign currencies like last year," it said.
According to Saigon Securities (SSI), the SBV's bill issuance could be seen as a way to adjust short-term liquidity within the system and is a common practice by central banks.
In the near future, the central bank may continue issuing bills, but this does not mean a reversal in monetary policy because liquidity regulation is a timed and flexible operation. Additionally, the effectiveness of intervention in exchange rate pressure depends on various factors, especially the trend of the USD index.- (VNA/VLLF)