Economic news review May 22

The central exchange rate increased by 3 VND, the VN-Index decreased by 10.23 points, or the Government determined to continue implementing the policy of exempting and reducing interest rates, extending, postponing, restructuring debts, and exempting, reducing, and extending taxes, fees, charges, and land rents to remove difficulties for production and business... are some notable economic information on May 22.

Economic news review

Domestic news

In the foreign exchange market on May 22, the State Bank listed the central exchange rate at 24,254 VND/USD, an increase of 3 VND compared to the previous session.

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

On the interbank market, the USD-VND exchange rate closed at 25,466 VND/USD, continuing to increase by 03 VND compared to the session on May 21.

The dollar-dong exchange rate on the free market remained unchanged in both buying and selling directions, trading at 25,650 VND/USD and 25,740 VND/USD.

On May 22, the average interbank interest rate in VND increased sharply by 0.30 - 0.47 percentage points in all terms of 1 month or less compared to the previous session; specifically: overnight 4.63%; 1 week 4.73%; 2 weeks 4.85% and 1 month 4.98%.

The average interbank USD interest rate remained unchanged for most terms, except for an increase of 0.01 percentage point for the 1-month term, trading at: overnight 5.27%; 1 week 5.32%; 2 weeks 5.39%, 1 month 5.42%.

Government bond yields in the secondary market remained unchanged for the 3-year term while increasing sharply for the remaining terms; closing at: 3-year 1.86%; 5-year 2.04%; 7-year 2.34%; 10-year 2.85%; 15-year 3.03%.

In the open market operations on the mortgage channel, the State Bank of Vietnam bid 25,000 billion VND with a term of 07 days, the interest rate increased to 4.5%. There were 24,999.99 billion VND won bids, there were 2,791.17 billion VND matured. The State Bank of Vietnam bid 28-day SBV bills, bidding interest rates. There were 650 billion VND of bills won bids with the interest rate increased to 4.0%, there were 1,400 billion VND of bills matured.

Thus, the State Bank of Vietnam pumped a net VND22,958.82 billion into the market, the volume of treasury bills circulating in the market decreased to VND56,340 billion, the volume on the mortgage channel increased to VND28,047.31 billion.

On the bond market on 22/25, the State Treasury successfully mobilized VND5,191 billion/VND9,500 billion of government bonds called for bid (winning rate 55%). Of which, the 5-year term mobilized VND2,000 billion/VND3,000 billion of bid, the 10-year term mobilized VND2,200 billion/VND3,000 billion, the 15-year term mobilized VND200 billion/VND2,000 billion and the 30-year term mobilized VND791 billion/VND1,000 billion of bid. The 20-year term mobilized VND500 billion, however, there was no winning volume. The winning interest rate for the 5-year term is 1.75% (+0.03 percentage points compared to the previous auction), the 10-year term is 2.66% (+0.05 percentage points), the 15-year term is 2.83% (+0.05 percentage points), and the 30-year term is 3.06% (+0.03 percentage points).

On the stock market today, profit-taking pressure caused red to cover many stocks, especially blue-chips. At the end of the session, VN-Index decreased by 10.23 points (-0.80%) to 1,266.91 points; HNX-Index added 1.86 points (+0.76%) to 245.15 points; UPCoM-Index inched up 0.25 points (+0.26%) to 94.70 points. Market liquidity was high with a trading value of nearly VND32,300 billion. Foreign investors continued to net sell more than VND767 billion on all three exchanges.

According to the Government's Report on supplementary assessment of the socio-economic situation and state budget in 2023; the implementation of the socio-economic plan and state budget in the first months of 2024 presented to the National Assembly on May 21, the Government determined to continue implementing policies on exemption and reduction of interest rates, deferral, debt restructuring and exemption, reduction and extension of taxes, fees, charges and land rents to remove difficulties for production and business. It is expected that in the last 6 months of the year, the Government will issue policies on exemption and reduction of taxes, fees and charges, with a total estimated amount of about 98 trillion VND; of which, a 2% reduction in value added tax.

International News

Last night, Vietnam time, the US Federal Reserve (Fed) released the minutes of its meeting in late April and early May. In this document, the Fed stated that the US economy continued to expand solidly in the first quarter, with employment increasing and unemployment remaining low. Inflation has cooled over the past year, but the current months have not shown much progress towards the target of 2.0%. Inflationary pressures have shown signs of increasing again for a number of factors, in both goods and services prices.

The members of the Federal Open Market Committee (FOMC) unanimously agreed to maintain the policy rate at 5.25% - 5.50% to achieve full employment and inflation at the 2.0% target in the future. The FOMC also maintained the view that it will carefully evaluate the data before making any adjustments to the policy rate, and does not expect to cut again until it has greater confidence that inflation is moving sustainably toward the target.

In addition, starting in June this year, the FOMC will slow the pace of its balance sheet reduction, from $65 billion/month to $25 billion/month.

The UK's Office for National Statistics (ONS) said that headline CPI and core CPI in the country increased by 2.3% and 3.9% respectively compared to the same period in April, both slowing down compared to the 3.2% and 4.2% of the previous month, but not reaching the 2.1% and 3.6% levels forecast by experts. The above figures show that headline CPI is at its lowest level since August 2021 and core CPI is at its lowest level since November 2021. In addition, headline CPI has also come close to the target of 2.0% pursued by the Bank of England (BoE).

Source: https://thoibaonganhang.vn/diem-lai-thong-tin-kinh-te-ngay-225-151934-151934.html