SBV continues to withdraw liquidity before the holiday

SBV extended its liquidity withdrawal for a third consecutive week, signaling a softer pressure in the banking system despite the upcoming long holiday. As a result, interbank rates shifted, with the overnight rate rebounding after last week’s sharp decline. On the FX front, the USDVND cooled even as the U.S. dollar strengthened globally, likely reflecting weaker demand for importing materials in the process manufacturing sector. Given that negotiations between Vietnam and the U.S. are approaching, the final impact on Vietnam’s outlook will largely depend on the outcome of these upcoming talks.