SBV turns to liquidity withdrawal as pressures eased

This week, the SBV returned to liquidity withdrawal after the pressures on the banking system and the exchange rate eased. Specifically, the interbank rate curve dropped sharply at short tenors, while rising slightly at the long-end of the curve, indicating that short-term liquidity pressures have subsided and shifted to longer tenors. In the FX market, the USDVND exchange rate dropped significantly as the USD’s momentum stalled, mainly due to the market’s reaction to President-elect Donald Trump’s tariff stance and the nomination of key cabinet positions in his upcoming administration. In the coming period, USDVND is expected to continue fluctuating due to the unpredictable performance of the greenback, which is majorly affected by market sentiment in relation to Trump’s upcoming era.