A control of deposit interest rates and a commitment to support liquidity for commercial banks made by the central bank last week will support this group in the short and medium term. — Photo cafef.vn

HÀ NỘI — Liquidity pressure in the banking system last week showed signs of easing as interbank interest rates decreased across the board and the State Bank of Vietnam (SBV) net withdrew more than VNĐ66 trillion (US$2.5 billion) through the open market operation (OMO) channel.

The previous week had seen strong net injections by the central bank amid high interbank interest rates.

Last week, the average overnight interest rate fell from 8.58 per cent per year at the beginning of the week to 5.79 per cent at the end of the week. Interest rates for longer maturities also declined.

Despite the decrease, analysts at Mirae Asset Securities Company said the liquidity of banks and interest rates in the interbank market still reflected significant pressure in the banking system as banks must not only maintain liquidity indicators in accordance with the law but also meet demand for new loans.

The market has recently seen sharp fluctuations in interbank interest rates and in this context, yield is no longer the only factor for deposits as safety also plays a significant role.

The analysts believe this is likely due to liquidity constraints at small-sized credit institutions.

However, they noted that control of deposit interest rates and a commitment by the central bank last week to support liquidity for commercial banks will support this group in the short and medium term. — BIZHUB/VNS