SBV weights more on exchange rate stability
SBV returned to withdraw money market through its Bill issuances this week, signaling that the central bank navigated its effort partly to stabilize the increasing exchange rate. It is worth noting that counterparties were excited to offerings with high participation (13 participants for each auction session) and relatively low winning yields (0.5-0.6% p.a.). This situation seems to reflect the liquidity excessiveness of the banking system. SBV’s decision likely originates from the upward pressure of USDVND that could endure due to the high import season and the persistent USD-VND rate differentials.