Economic news review December 18

The central exchange rate increased by 8 VND, the VN-Index increased by 4.28 points or the accumulated disbursement of foreign loan capital for public investment plans in the first 11 months of this year by ministries and branches only reached 39.06% of the adjusted capital plan, equivalent to 3,285.7 billion VND... are some notable economic information on December 18.

Economic news review

Domestic news

Foreign exchange market, session 18/12, State Bank listed the central exchange rate at 24,278 VND/USD, up 08 VND compared to the previous session.

The buying and selling prices of USD were kept unchanged by the State Bank of Vietnam at 23,400 VND/USD and 25,450 VND/USD, respectively.

On the interbank market, the dollar-dong exchange rate closed at 25,453 VND/USD, up 13 VND compared to the session on December 17.

The dollar-dong exchange rate on the free market decreased by 5 VND in both buying and selling directions, trading at 25,620 VND/USD and 25,720 VND/USD.

Interbank money market, on December 18, the average interbank VND interest rate decreased by 0.05 - 0.53 percentage points in most terms of 1 month or less, except for an increase of 0.45 percentage points in the 2-week term compared to the previous session; specifically: overnight 2.80%; 1 week 3.68%; 2 weeks 4.75 and 1 month 5.02%. The average interbank USD interest rate increased by 0.01 percentage point in the overnight term while remaining unchanged in the 1-week and 2-week terms, and decreased by 0.02 percentage point in the 1-month term, trading at: overnight 4.62%; 1 week 4.66%; 2 weeks 4.70%, 1 month 4.74%.

Government bond yields in the secondary market increased across all maturities, closing at: 3-year 1.91%; 5-year 2.15%; 7-year 2.39%; 10-year 2.88%; 15-year 3.04%.

In open market operations, on the mortgage channel, the State Bank of Vietnam bid 1,000 billion VND, 7-day term, interest rate at 4.0%. There were 1,000 billion VND won bids; there were 19,999.93 billion VND matured. The State Bank of Vietnam bid SBV bills at 14-day and 28-day terms, bidding interest rates. There were 5,350 billion VND won bids at 14-day term and 1,500 billion VND won bids at 28-day term, both with interest rate at 4.0%. There were 1,050 billion VND matured bills.

Thus, the State Bank of Vietnam net withdrew VND24,799.93 billion from the market through the open market channel in yesterday's session. There were VND23,999.93 billion circulating on the mortgage channel, and VND76,635 billion in treasury bills circulating on the market.

Bond market, on December 18, the State Treasury successfully bid VND829 billion/VND9,000 billion of government bonds called for bid, with a winning rate of 9%. Of which, the 5-year term won VND100 billion/VND2,000 billion called for bid, the 10-year term raised VND300 billion/VND4,500 billion called for bid and the 30-year term raised VND429 billion/VND1,500 billion called for bid. The 15-year term alone called for VND1,000 billion but there was no winning volume. The winning interest rate for the 5-year term was 2.0% (+0.09 percentage points compared to the previous auction), the 10-year term was 2.75% (+0.09 percentage points) and the 30-year term was 3.18% (+0.08 percentage points).

The stock market improved at the end of yesterday's session thanks to small-cap stocks. At the end of the session, VN-Index increased by 4.28 points (+0.34%) to 1,266.0 points; HNX-Index added 0.54 points (+0.24%) to 227.43 points; UPCoM-Index inched up 0.30 points (+0.32%) to 93.07 points. Market liquidity remained low with a trading value of about VND14,000 billion. Foreign investors net sold slightly VND42 billion on all three exchanges.

A recent report by the Ministry of Finance shows that the cumulative disbursement of foreign loan public investment capital in the first 11 months of this year by ministries and sectors has only reached 39.06% of the adjusted capital plan, equivalent to VND 3,285.7 billion. Since the beginning of the year, 6 ministries have proposed to return the foreign loan public investment capital plan for 2024 with a total requested return of more than VND 2,092.4 billion.

International News

The US Federal Reserve (Fed) cut its policy interest rate at its year-end meeting, but was more cautious about the future. At this meeting, the Fed forecast US GDP to increase by 2.5% and 2.1% in 2024 and 2025, respectively, both higher than the forecast of 2.0% in September. The unemployment rate is forecast at 4.2% this year and slightly increase to 4.3% next year, both lower than the previous forecast of 4.4%.

On inflation, the Fed forecasts headline personal consumption expenditures (PCE) prices to rise 2.4% this year and 2.5% in 2025, down from previous forecasts of 2.3% and 2.1%, respectively. Core PCE is forecast to rise 2.8% and 2.5% in 2021, still decelerating but more persistently than the September forecasts of 2.6% and 2.2%.

Regarding the policy interest rate, in this meeting, the Federal Open Market Committee (FOMC) decided to cut another 25 basis points, from 4.50% - 4.75% to 4.25% - 4.5%. The Fed forecasts that it will only cut interest rates twice more in 2025 instead of four times as before, bringing the policy interest rate down to 3.75% - 4.0% by the end of next year.

After this Fed meeting, the financial market reacted quite strongly, the USD-Index climbed to 108.2 points, the 10-year bond yield increased by 11 percentage points to 4.52% and the Dow Jones industrial index fell 2.58% d/d to 42,326 points.

The Office for National Statistics reported that headline CPI and core CPI rose 2.6% and 3.5% year-on-year in November, up from 2.3% and 3.3% in October, and in line with forecasts of 2.6% and 3.6%. These are the highest increases in the second half of 2024. The main reasons for the increase in inflation were mainly fuel and clothing prices.

The information was released right before the Bank of England (BoE) meeting today, December 19. The market predicts that this agency may not cut the policy interest rate further until the end of the first quarter of 2025. The results of the year-end meeting will be announced by BoE at 7:00 pm tonight, Vietnam time.

Source: https://thoibaonganhang.vn/diem-lai-thong-tin-kinh-te-ngay-1812-159073-159073.html