Interest rates for Vietnamese dong loans of different tenors have dropped sharply on the inter-bank market following the Tet (Lunar New Year) holiday. — Photo VNA/VNS

Interest rates for Vietnamese dong loans of different tenors have dropped sharply on the inter-bank market following the Tet (Lunar New Year) holiday.

On Monday, the overnight rate was quoted at 4.25 per cent per year, down 1 per cent against the week prior to Tet, which took place from January 16 to 20.

The rates for one-week loans stood at 4.48 per cent per year, while it was 4.6 per cent for two-week loans and 4.72 per cent for one-month loans, down significantly compared with pre-Tet levels.

The decline of inter-bank interest rates was similar to previous years, as after Tet, liquidity in the banking system is often stable owing to growing deposits of residents and enterprises.

Money dealers have forecast rates on the inter-bank market in next few weeks will move sideways or inch down.

Bao Viet Securities Company forecast that the central bank is expected to withdraw money via the open market operation (OMO) after Tet.

In the week prior to Tet, when capital demands rose sharply to meet payment and import requirements, the central bank had to make a net injection of VND93.48 trillion (US$4.11 billion) via OMO to support liquidity for the banking system. — VNS