VietNamNet Bridge – The State Bank of Vietnam (SBV) has
unexpectedly resumed its sale of notes to commercial banks after four months of
interruption.
Only 6 trillion dong worth of
notes has been sold after four auctions, a very modest figure if compared with
the sold volumes in the first months of the year. These notes have shorter
terms (28, 56 and 91 days), while the notes issued earlier this year had the
terms of 182 days at the longest.
The notes’ interest rates are
between 4.5 and 6.5 percent per annum, which was equal to the notes’ interest
rates defined at the bids in late second quarter of the year, but is relatively
low if compared with the bids in March 2012, when the interest rate climbed to
12 percent per annum.
The above said interest rates are
equal to the current average interest rates on the interbank market.
It is obvious that the central
bank issues notes with an aim to withdraw money from circulation. However, the
move by the central bank still causes a surprise to many people, because the
issuance is carried out at this moment, when the credit has been growing very
slowly, and the deposit interest rates have been on the rise.
Meanwhile, some observers believe
that the central bank has every reason to issue notes now. It needs to withdraw
money from circulation, while banks need somewhere to inject money in, as they
have capital abundant.
The reports showed that the
mobilized capital in the first nine months of the year increased by 12 percent
over 2011, while the outstanding loans increased by 2 percent only. The
disbursement has been going very slowly since the beginning of the year
partially because very few clients can satisfy the banks’ requirements to be
eligible for loans.
Meanwhile, banks, which can see
the high inventories and the bad performance of the national economy, dare not
to provide loans in big quantities. The high bad debt ratio has also been cited
as an important factor that hinders the credit growth.
The interbank has also been very
quiet over the last many months. The banks, which have capital in excess,
cannot find the borrowers in the market, because the borrowers cannot meet the
requirements on collaterals, while the interest rates have dropped sharply.
The Circular No. 21 by the State
Bank which stipulates strict regulations on the lending in the interbank market
has made a lot of small banks unable to seek capital from other banks.
Injecting money in bonds also
proves to be an important investment channel for banks. However, the
attractiveness of the different types of bonds is different.
The Bank for Social Policies has
witnessed eight unsuccessful auctions. The Vietnam Development Bank organizes
bids occasionally. Only the government bonds issued by the treasury really
attract banks. It is simply because the bonds issued by the Bank for Social
Policies and the Vietnam Development Bank had the interest rates lower than
that of the government bonds, even though they had higher risks.
Observers said most of the banks
have invested sufficiently in bonds, and they do not have the demand for more
bonds. Banks do not intend to pour money into bonds any more, because bonds are
long term debenture, while they only have short term capital.
That explains why, observers
said, only big banks with profuse capital, can pour money into bonds.
Other banks would prefer
injecting money in short term notes, which fit their short term capital.
The observers also believe that
the central bank sells notes to neutralize the amount of Vietnam dong it pumped
before into circulation when it bought foreign currencies in big quantity
recently.
Compiled by C. V
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