SBV turns to liquidity withdrawal as USDVND rebounds

This week, the SBV resumed liquidity withdrawal following significant injections in the previous week, amid a notable rise in exchange rates. The interbank rate curves shifted downward across all tenors, with a marked decline in the overnight and weekly tenors. In the FX market, USDVND experienced a substantial increase, marking the third consecutive week of appreciation as the DXY reached its highest level in seven weeks. This was driven by a robust U.S. labor market and heightened global economic instability due to conflicts in the Middle East, which boosted the USD’s strength throughout the week. SBV’s actions reflect a cautious stance as managing exchange rates while supporting economic recovery has become softer due to the rosy 3Q24 economic performance.