SBV resumes liquidity injection

This week, the SBV resumed liquidity injection as accelerating lending activities in year-end seems leave some pressure on the liquidity condition of the banking system. The interbank rate curve drifted downward across most short tenors this week after SBV offered a significant amount of repo contracts, while the 1M tenor stayed higher than last week. On the external front, the USDVND edged up, hovering near its upper limit as the year draws to a close, and is expected to remain volatile despite market expectations that the Fed will cut interest rates in next week’s FOMC meeting. This volatility stems from the DXY rallying on the anticipation that the Fed’s rate-cutting path will slow in 2025 when Donald Trump returns.