Local and regional market sentiment recovered slightly as market expectations focused on the possibility that the Fed might lower interest rates twice this year.
Liquidity in the interbank market has been abundant, helping the State Bank of Việt Nam (SBV) resume the issuance of treasury bills after five months to withdraw Vietnamese đồng from the banking system.
Banks have to mobilise long-term capital at high costs by issuing certificates of deposit (CD) in Vietnamese đồng with high interest rates to lure depositors, causing concerns about a domino effect on lending rates.
Vietnamese shares recovered from a short-lived decline as investor confidence turned positive ahead of the start of the DPRK-USA Summit.
Interest rates for Vietnamese đồng deposits would remain stable or even decline over the next few months, analysts from Saigon Securities Inc. (SSI) forecast.
The Vietnamese stock market was Southeast Asia’s most successful market in 2018 in terms of capital mobilisation, said Deputy Prime Minister Vương Đình Huệ.
The country’s credit growth target of 14 per cent set for this year, the same rate as last year, was reasonable and achievable, economists said.
The State Bank of Vietnam (SBV) buying net US$4 billion in January may be the way to lower Vietnamese đồng lending rates.