The central bank has withdrawn VND177 trillion (US$7.79 billion) via open market operations and the issue of treasury bills in the past week. — Photo enternews.vn

The State Bank of Viet Nam has withdrawn VND177 trillion (US$7.79 billion) via open market operations and the issue of treasury bills in the past week.

The central bank issued 14-day treasury bills worth VND50 trillion, shows a report from Saigon Securities Incorporation (SSI).

According to SSI, the withdrawals were made as the central bank had to pump a large amount of money into the banking system to support liquidity before Tet (Lunar New Year), when capital demands surged sharply.

In the past week, interest rates for Vietnamese dong loans of different tenors have also dropped sharply in the inter-bank market. The overnight rate was quoted at 1.6 per cent against 4.45 per cent at the end of previous week.

The rates for one-week, two-week and three-week loans also stood low at 2 per cent, 2.9 per cent and 3.8 per cent, against 4.67 per cent, 4.73 per cent and 4.8 per cent, respectively, at the end of last week.

SSI has forecast that the interest rate in the inter-bank market will decline further. — VNS