As a result, nine out of 12 participants won the bid at an interest rate of 0.65%, higher than the 0.58% on the previous day and 0.49% in the beginning of the week.
It was the fifth consecutive issuance of bills by the SBV, bringing the total value to nearly 70 trillion VND. These bills all have a 28-day maturity period and were offered via interest rate auction. The number of participants ranged from 11-17.
MayBank Securities believed that the central bank’s money withdrawal from the system via bill issuance is a measure to ease exchange rate pressure, bringing it to the target of /-3% set for this year. In August and September, the exchange rate increased rapidly and showed signs of exceeding the target.
"This is a careful calculation given the system's excess liquidity and a wise step as it does not need to sell foreign currencies like last year," it said.
According to Saigon Securities (SSI), the SBV's bill issuance could be seen as a way to adjust short-term liquidity within the system and is a common practice by central banks.
In the near future, the central bank may continue issuing bills, but this does not mean a reversal in monetary policy because liquidity regulation is a timed and flexible operation. Additionally, the effectiveness of intervention in exchange rate pressure depends on various factors, especially the trend of the USD index.
