SBV pouring more funds into banking system

The State Bank of Vietnam (SBV) has poured additional money into the country’s banking system in early days of 2022 to support the economy and the banking sector.

It had already poured in VND1.1 trillion ($48.6 million), and in the first session of this week poured in an additional VND10 trillion ($442.7 million), with three credit institutions approaching VND2.9 trillion ($128.3 million), bringing the circulating volume on Open Market Operations (OMO) to VND4 trillion ($176.9 million).

Many banks have continued to increase their deposit interest rates for individual customers. In just the past two months, commercial banks have raised rates by 0.1 to 0.5 points. Banks have also offered many promotions to attract funds from individuals, in which interest rates via the online deposit channel are about 0.2-0.3 points higher than traditional deposit channels.

The volume of money going into the banking system early in the year is still low compared to previous years. This time last year, there were sessions where the SBV poured in nearly VND15 trillion ($662.9 million).

Analysts have said that the banking system has been more proactive this year than last year in funding sources and liquidity, with interest rates expected to be significantly down this year. According to the SSI Securities Company, the need for funding from the government in 2022 is expected to be about VND410 trillion ($18.1 billion) to gain VND372 trillion ($16.4 billion) to finance the budget deficit and VND40 trillion ($1.7 billion) in government bonds.