Interbank trading Dong -53%, dollar +89% in week ending May 25

The total inter-bank trading value of dong fell 52.8% to VND 82.066 trillion from VN121.444trillion in the week ending May 25, while that of the dollar soared to $ 2.659 billion from $ 1.408 billion, said the State Bank of Vietnam (SBV).

Trading value of the dong, mostly overnight term, were VND44.922 trillion, accounting for 55% of the total trading during the week. Meanwhile, overnight trading of U.S dollars was $1.650 billion, or 62% of the total turnover in the greenback.

The average interest rates of the dong on the inter-bank market edged up by 0.02-0.38% for overnight, 2-week, 3-month and non-term loans, in which the average overnight interest rate rose to 13.02% p.a.

However, the average interest rates for overnight, 12-month and non-terms fell by 0.23% and 0.8% from last week. Interest rate for one-week to 3-month terms inched up by 0.1% to 0.35%, while those for 6-month terms remained at 13.5% p.a. The average overnight interest rate edged down to 12.32%.

The average interest rates for dollars rose by between 0.05% and 0.76% for most terms, in which those for 3-month and 6-month terms increased by 0.65% and 0.76%, respectively.The average overnight interest rate for dollar edged up 0.01% to 0.53%, the SBV added.

Dong lending interest were 14.5%-17% p.a. for rural areas, 17-20% p.a. for production loans and 20-23% p.a. for non-production loans. Deposit interest rates ranged between 13.5% p.a. and 14% p.a.

Dollar deposit interest rates were almost unchanged, at 0.1-1% for demand loans, 2.6-3% for term loans after dollar deposit interest rates were capped at 3% for individuals and 1% for institutions from April 13. Dollar lending rates at 6-7.5% for short terms, 7-8.5% for medium to long terms.

The central bank’s Governor Nguyen Van Giau on Friday confirmed that the SBV does not have any policy to cap lending interest rates, responding to talk that the authorities were considering such a cap after a jump in rates.

Trading in the local forex market was more stable last week. The public and organizations have sold dollars to lenders, helped to pick up supply of dollars in the banking system.

Local lenders quoted dollar prices at VND 20,520 – 20,610, respectively for bids and ask.

Table of Interest Rates in the Weeks Ending May 25 and May 13 (Unit %) – Stoxplus.com

Week	Terms	O/N	1 week	2 weeks	1 month	3 months	6 months	12 months	On demand
Ending May 25	VND	12.32	13.22	13.37	13.06	13.13	13.50	12.50	1.89
	USD	0.53	1.12	1.37	1.37	2.96	1.38	0.88	-
Ending May 13	VND	13.02	12.95	13.17	12.85	13.35	13.40	13.50	2.06
	USD	0.52	0.85	1.25	1.40	2.29	0.12	1.40	-

Tags: Vietnam banking industry, vietnam dong, Vietnam finance, Vietnam financial