Demand for the Vietnamese dong has surged significantly recently, pushing up interest rates in the inter-bank market.

The State Bank of Viet Nam (SBV) last week tripled its net injection against the previous week to VND45.2 trillion (US$1.96 billion) to meet the rising demand.

The demand pushed interest rates on the the inter-bank market up by 0.16-0.2 percentage points for most loans last week. The rate for overnight loans, for example, closed last week at 1.36 per cent, up 48 basis points compared with the beginning of the year.

The SBV made a net injection of nearly VND210 trillion in the first half of this year, which helped the liquidity of commercial banks, according to reports from the National Financial Supervisory Commission.

Besides the net injection, the liquidity of commercial banks in H1 was also supported by rising deposits and a slowdown of credit. The commission’s report showed that the capital mobilisation in H1 rose by 8 per cent on-year while credit growth during the period was estimated at only 6.5-6.9 per cent.

Interest rates in the inter-bank market remained at a low level in the first six months. By June 25, rates for overnight and one-week loans stood at 1 per cent and just 1.6 per cent for one-month loans, down 0.7-0.8 percentage points against the end of May and 1.6-2 percentage points against the same period last year. — VNS