Economic news review March 20

The central exchange rate increased by 7 VND, the VN-Index increased sharply by 17.62 points or the first period of March 2024, the country's trade balance of goods had a surplus of 1.16 billion USD... are some notable economic information on March 20.

Economic news review March 18 Economic news review March 19

Economic news review

Domestic news

In the foreign exchange market on March 20, the State Bank listed the central exchange rate at 23,999 VND/USD, a slight increase of 7 VND compared to the previous session.

The USD buying price was kept unchanged at 23,400 VND/USD by the State Bank of Vietnam, while the USD selling price was listed at 25,148 VND/USD, 50 VND lower than the ceiling exchange rate.

On the interbank market, the dollar-dong exchange rate closed at 24,785 VND/USD, up 33 VND compared to the session on March 19.

The dollar-dong exchange rate on the free market increased by 30 VND in both buying and selling directions, trading at 25,480 VND/USD and 25,580 VND/USD.

On March 20, the average interbank VND interest rate continued to decrease by 0.02 - 0.14 percentage points in all terms of 1 month or less compared to the previous session. Specifically: overnight 0.22%; 1 week 0.47%; 2 weeks 1.23% and 1 month 1.82%.

The average interbank USD interest rate increased by 0.01 - 0.02 percentage points for short terms while remaining unchanged for 2-week and 1-month terms; trading at: overnight 5.21%; 1-week 5.31%; 2-week 5.36%, 1-month 5.40%.

Government bond yields in the secondary market increased across all maturities; closing at: 3-year 1.46%; 5-year 1.68%; 7-year 2.06%; 10-year 2.54%; 15-year 2.73%.

In the open market operations on the mortgage channel, the State Bank of Vietnam bid 3,000 billion VND with a term of 7 days, the interest rate remained at 4.0%. There was no winning volume, no circulating volume on this channel. The State Bank of Vietnam bid for SBV bills with a term of 28 days, bidding for interest rates. There were 15,000 billion VND of winning bills with the interest rate reduced to 1.34%.

Thus, the State Bank of Vietnam net withdrew VND15,000 billion from the market in yesterday's session, the volume of treasury bills circulating in the market increased to VND114,998.8 billion.

On the bond market on March 20, the State Treasury successfully mobilized VND6,095 billion/VND13,500 billion of government bonds called for bid, equivalent to a winning rate of 45%. Of which, the 10-year term successfully mobilized VND3,095 billion/VND5,000 billion called for bid and the 15-year term mobilized VND3,000 billion/VND5,000 billion called for bid. The 5-year and 30-year terms were called for bids of VND3,000 billion and VND500 billion, respectively, but the bids failed. The winning interest rate for the 10-year term was 2.39% (+0.03 percentage points compared to the previous auction), and for the 15-year term was 2.59% (+0.03 percentage points).

The stock market had an optimistic atmosphere yesterday when strong buying power appeared in the early afternoon session. At the end of the session, VN-Index increased sharply by 17.62 points (+1.42%) to 1,260.08 points; HNX-Index added 1.86 points (+0.79%) to 238.03 points; UPCoM-Index decreased slightly by 0.06 points (-0.07%) to 90.54 points. Market liquidity increased slightly compared to the previous session with a transaction value of over VND24,900 billion. Foreign investors continued to net sell more than VND480 billion on all three exchanges.

According to the newly announced data of the General Department of Customs, in the first period of March 2024, the country's trade balance of goods had a surplus of 1.16 billion USD, and the cumulative surplus from the beginning of the year to March 15 was 6.17 billion. Specifically, the export turnover from March 1-15 reached 16.67 billion USD, and the import reached 15.51 billion. The export turnover from January 1-15/3 reached 75.88 billion USD, and the import reached 69.71 billion. The cumulative total import-export turnover of the country from the beginning of the year to March 15 reached 145.59 billion USD, an increase of 18.41% over the same period in 2023.

International News

The US Federal Reserve (Fed) has an important meeting. Yesterday, March 20, the US Federal Open Market Committee (FOMC) forecasted that the country's GDP will grow by about 2.1% in 2024 (+0.7 percentage points compared to the forecast in December 2023). In addition, the unemployment rate at the end of the year will be 4.0% (-0.1 percentage points), the total PCE price index and the core PCE will be 2.4% (unchanged) and 2.6% respectively compared to the same period (+0.2 percentage points). The FOMC said that current data show that the US economy is growing at a rapid pace, the job market is strong and inflation remains high.

Accordingly, the agency decided to keep the policy rate unchanged at 5.25% - 5.50% at this meeting, aiming to achieve stable inflation at 2.0% over the long term. The FOMC will carefully evaluate upcoming data before making any adjustments to the policy rate. The FOMC also affirmed that a cut in the policy rate would be appropriate when the agency has greater confidence that inflation is moving towards the target on a sustainable basis.

However, the FOMC still forecasts the policy rate at the end of 2024 at around 4.6% (in the range of 4.5% - 4.75%), down 75 basis points from the current level of 5.25% - 5.50%. The CME's dominant forecast scenario shows that the market still expects the Fed to cut the policy rate three times this year, each cut by 25 basis points, with the first cut coming at the June 12, 2024 meeting.

The UK consumer price index (CPI) continued to cool down in February. The UK Office for National Statistics said that the headline CPI and core CPI in the country increased by 3.4% and 4.5% respectively compared to the same period in February, slowing down significantly compared to the previous month's 4.0% and 5.1%, nearly matching the forecast of 3.5% and 4.6%.

Experts expect inflation to continue to cool rapidly in the first half of 2024, in the context of the economy under pressure from high interest rates. Today, March 21, the Bank of England (BoE) will hold an important meeting on monetary policy. The market predicts that this agency will temporarily not cut the policy interest rate at 5.25% until the end of the second quarter of 2024.

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