SBV posts over 134.5tr dong net withdrawal on OMO in three weeks after Tet

The total amount of capital pumped on open market operations (OMO) in three weeks after Lunar New Year (Tet) holiday has been narrowed more and more while the State Bank of Vietnam (SBV) continued to withdraw capital. However, the liquidity of the market still remains relatively good.
In the week between February 13 and 17, the central bank injected over 5.5 trillion dong on OMO. Notably, in the session on February 15, there were no transactions being performed.

The total amount of capital withdrawn on OMO in week reached over 28.8 trillion dong, leading to a net withdrawal of 23.356 trillion dong in week.

Previously, in two weeks after Tet holiday, the central bank posted net withdrawal of 54.822 trillion dong and 56.356 trillion dong respectively. Totally, in three weeks after Tet holiday, from January 30 to February 17, 2012, the central bank has posted a net withdrawal of over 134.5 trillion dong on OMO.

This figure far exceeded the net injection volume in January 2012 and virtually all amount of money being pumped before Tet has been withdrawn by the central bank.

Last week, the central bank has officially announced the Directive No 01 on running the monetary policy in 2012. The most notable point in this policy is the different levels on credit growth of credit institutions in 2012.

Accordingly, the credit growth lines in 2012 will be divided into four groups: Group 1 (bank with healthy operations) will have the maximum credit growth of 15-17 percent, Group 2 (bank with average operations) at maximum 15 percent; Group 3 (bank with below average operations) at maximum 8 percent and Group 4 (weak banks) will be disallowed to have credit growth in 2012.

According to the information from Dat Viet local newspaper, the credit growth quotas for each bank has been sent on February 16 by the central bank.

Accordingly, there will be about eight commercial banks being classified in the Group 4-the group without credit growth in 2012. However, the list of these weak banks has been unveiled.

According to Saigon Securities Inc (SSI), the liquidity of the entire banking system has signs of improvement and the interbank interest rate has decreased sharply after Tet holiday whereby the overnight interest rate is now at 9.5 percent per annum. – Vietbiz24

Tags: Vietnam banking industry, Vietnam banks, Vietnam finance

Posted by VBN on Feb 21 2012. Filed under Banking-Finance. You can follow any responses to this entry through the RSS 2.0. You can leave a response or trackback to this entry