State Bank raises OMO interest rate to 4.5% to ease exchange rate pressure. (Photo: Vietnam+)
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On May 22, the State Bank announced the results of its open market operation (OMO) auction, with interest rates reaching 4.5% per annum.
Specifically, the State Bank lent nearly VND 25 trillion to nine institutions through its collateralized lending facility (OMO) at an interest rate of 4.5% per annum, with a maturity of seven days. This is the second time the State Bank has raised the OMO interest rate in the past month.
Previously, in the April 23 auction, the State Bank had increased the OMO interest rate from 4% to 4.25% per annum, and this rate was maintained until the May 21 auction.
Also, on May 22, the State Bank issued bills worth VND 650 billion with a maturity of 28 days. The auction yield increased from 3.9% per annum in the previous auction to 4% per annum, the highest since March 2023. Two institutions participated in the auction and both were successful bidders.
Experts believe that the increase in the OMO interest rate could also help the State Bank reduce the pressure to sell foreign currency. In recent sessions, the USD exchange rate at commercial banks has once again reached the ceiling.
According to a survey of banks, this morning, Vietinbank announced a buying rate of 25,263 VND/USD and a selling rate of 25,466 VND/USD, up 3 VND. Vietcombank and BIDV offered rates of 25,266-25,466 VND/USD (buy/sell), up 3 VND compared to the previous session. Similarly, Agribank announced rates of 25,263-25,463 VND/USD, up 4 VND from the previous session.
In fact, for almost a month, despite the State Bank’s intervention in the foreign exchange market, the USD exchange rate at banks has continued to climb, even reaching the allowed ceiling. This has put significant pressure on foreign exchange reserves, which are only slightly above the safe threshold (3 months of imports) recommended by international organizations.
Thuy Ha
