According to data from the State Bank of Vietnam, the overnight lending rate on the interbank market, where banks borrow and lend to each other, rose to 6.45% per year on 30/6, nearly 4 times higher than a week earlier. From 1.62% on 24/6, the overnight rate has gradually increased through the trading sessions.

Similarly, interest rates for longer terms have also risen. The one-week rate climbed from 2.3% a week ago to 6.53%, while the two-week rate increased from 3.87% to 5.62%. The one-month rate also rose to 5.18% per year, up from 3.45%.

The rapid increase in interbank interest rates reflects the system's liquidity needs. In this context, the State Bank of Vietnam has injected a total of over 90 trillion VND through open market operations over the past week.

On 30/6, through repurchase agreements, the State Bank of Vietnam offered 50 trillion VND for seven-day terms, 25 trillion VND for 14-day terms, and 5 trillion VND for 91-day terms, all at an interest rate of 4%. A total of 52,904 trillion VND was successfully bid across all three terms. The monetary authority did not offer any bills in yesterday's session.

Thus, on the last day of June, the State Bank of Vietnam injected over 52.9 trillion VND into the market through open market operations. The agency also injected nearly 40 trillion VND the previous week.

According to calculations by the Vietnam Interbank Market Research Association (Vira), there is 143,222 trillion VND circulating in repurchase agreements. In addition, there are about 22.5 trillion VND worth of State Bank bills circulating in the market.

Before resuming its focus on bill issuance, in the first half of this year, the State Bank of Vietnam implemented open market operations to reduce interbank interest rates. This supported banks in accessing low-cost capital, enabling them to lower lending rates. Interbank interest rates had been declining since early March, reaching their lowest point in over a year before this recent surge.

Quynh Trang