13
December
The money market this week remained calm heading to the Fed’s rate decision in December-mid. The interbank market continued to experience stable development with significantly high volume and rate when SBV persistently managed OMO transactions at the rate of 6.00%. USDVND dropped further despite the upcoming 50bps or more increase in the U.S. policy rate, implying that what caused the scarcity in USD source has likely reversed.
06
December
The development of the forex market is in the spotlight this week when USDVND experienced a significant drop of 0.13% compared to the last week. The cooling USDVND is attributable to the less hawkish tone from Fed’s talks and possible foreign capital inflow via the capital market. Besides, funding condition in the money market keeps stable this week interbank trading value remains high with a slight change in interest rate.
30
November
The liquidity condition in the money market regained stability for the second week as the interbank market continued recording high trading volume despite the short-term funding cost being hard to be cheap as before. The foreign exchange this week suggests a few signals of a cooling upturn when SBV continuously provided minor adjustments in the selling price of the greenback, and interbank USDVND reduced further. However, we predict that the monetary authority will keep its eyes on developments in the forex market when the December FOMC is counting down.
22
November
This week provides more evidence for the recovery in the money market, especially in terms of the trust, after a few weeks of SCB’s resolution. Interbank trading volume has increased significantly, likely indicating that participants are regaining confidence. However, the short-term funding cost is hard to return cheap when upward pressure on USDVND remains high. Hence, we predict the central bank to sustain OMO transactions at this price base to focus on forex stability.
16
November
Vietnam’s money market has eased this week with significantly lower interest rates for short-term tenors and a higher trading value, implying that traders have regained confidence after a few weeks of SCB’s resolution. SBV tends to lower its money injection when the liquidity condition in the banking system seems to loosen and redirects the attention to the FX market stability.
08
November
Although SBV sustains the support liquidity to commercial banks this week but with has a high funding cost under the pressure of USD outflow. The overnight interbank rate converges to the level that SBV offers in repo and T-bill transactions. We predict that the funding cost in the money market will remain high in the coming weeks.
01
November
Although SBV returns to support liquidity to its counterparties this week, funding cost in the money market has increased significantly in preparation for FOMC’s meeting in November. The development in the foreign exchange market remains tight as the interbank USDVND this week still anchors to SBV’s selling price, indicating that FX traders are watching closely to Fed’s decision this time. Due to the importance of the Fed’s interest rate decision in November, we predict that interbank rates in the Vietnam money market will remain high for several next weeks.
25
October
The money market has eased this week after SBV released liquidity support with a massive amount of repo contracts. Interbank rates were lowering for the second consecutive week with lower trading value, likely indicating that the liquidity problem in the banking system was resolved. In this, investors seem to watch closely the development of the FX market heading FOMC meeting in November. USDVND upturn remains persistent and it seems that SBV would return to implement monetary tools to stabilize the exchange rate in the next few weeks.
18
October
The money market this week is gradually returning stable when SBV aggressively offers more liquidity to resolve the turbulence. The overnight interbank dropped sharply after surging to the year-high last week. Given the much cheaper funding cost of the local currency, USDVND steadily advanced, heading to Fed’s decision in the November meeting. We predict that the central bank will retain its priority of liquidity stability in the short term before returning to a longer-term objective of forex market stabilization.
15
March
Regarding the impact of the global commodity price surge on Vietnam CPI, we estimate that the current value of Brent price could push 2022 inflation to exceed the government target of 4%, mainly through the consumption channel. However, implementing well-established tools allows the Vietnam government to mitigate external shocks proactively. To sum up, we forecast that the global commodity surge would create temporary pressure on Vietnam inflation.
27
December
Key factors that drive the stock market to rise in 2022 include: (1) the Vietnam economy recovering and strong growth in 2022 and (2) new money will continue to flow into the stock market as new cash flows into stock markets and new money comes from capital flows of securities companies to margin.
09
November
A record plunge in Vietnam’s economy in 3Q21 has threatened economic prospects in the medium and long term growth. The government is standing in a right place to mitigate the lingering impact of the current outbreak and the next ones if they take appropriate actions in an appropriate timing and appropriate way. Recent macro and policy developments are signaling that the ongoing economic recovery would be smooth and sound, but it needs a booster shot, a sufficiently large fiscal relief package, to accelerate recovery momentum and help economic growth back on track. From our view, the “Economic Recovery and Development” fiscal support package, if successfully passed, would be a key to unlocking the full potential of the economic recovery.
26
July
Amid a widespread COVID-19 delta attack in the Southeast Asia region, Vietnam is stepping into the worst outbreak in both its health and economic impacts. Although the government actively deployed various solutions to follow the twin target that effectively controls the pandemic and promotes socio-economic development, the negative impact of economic recovery is inevitable. We predict that the COVID-19 economic impacts on domestic consumption and production levels would be partly reflected in oncoming macroeconomic updates under strict lockdowns nationwide.
18
June
Surging commodity prices and increasing inflation recently pose a considerable risk to global economic stability. However, the majority of global economists and monetary policymakers just saw this phenomenon as a transitory factor, and this trend would eventually reverse to a normal track in the medium- and long- term. Regarding Vietnam's situation, we saw a stable demand-supply balance in major commodities and well-controlled price conditions. The inflation shock in the near term, if it happens, would be expected to be transient and bear a little risk to the economic stability.
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