SBV enlarges liquidity withdrawal to cool down USDVND

This week, in response to the rapid increase in the exchange rate, the SBV implemented various measures, including intensifying liquidity withdrawals from the banking system, raising the selling price of USD, and the possible selling spot USD to its counterparties. Interbank rate curves shifted upward across all tenors as the systemwide liquidity became thinner, with notable increases in short and medium-term rates. In the FX market, the USDVND surged, marking its sixth consecutive week of appreciation. Meanwhile, the DXY continued its upward trend, driven by positive U.S. labor market data and Middle Eastern geopolitical tensions. Additionally, the VST’s bids for the USD to meet its international debt maturity fuelled the pressure. However, for future development, we expect the increase in USDVND to be limited as SBV starts to act.