Banking & Finance

The government bond and corporate bond segments are both growing rapidly and had boosted Vietnam’s local currency bond VET online - VET Chuyên mục khác Tiêu đề [8] ADB: Government bonds and corporate bonds growing quickly market to $91.5 billion by the end of December. Annual growth is up to 25.5 per cent, according to the Asian Development Bank (ADB).

According to the action plan for the banking sector issued by the State Bank of Vietnam (SBV), the key tasks in the time to come are implementing policies to support interest rates; increasing the charter capital of joint stock commercial banks in which the State holds over 50 per cent, including Vietcombank, VietinBank, BIDV, and Agribank; controlling and handling bad debts; and strictly controlling credit risk.

Although the US Fed’s decision to raise the basic interest rate for the first time since 2018 has not had much of an impact on Vietnam, analysts say that caution is nonetheless needed, especially after the fourth quarter of this year. According to Dr. Can Van Luc, it is necessary to continue operating monetary policy proactively and flexibly when there is a change in monetary policy at major central banks around the world, coordinate the implementation of plans to increase prices of goods managed by the State (especially gasoline, electricity, health, and education, etc.), monitor and evaluate foreign debt obligations in order to give timely warnings to enterprises, and control the exchange rate and foreign exchange market actively and flexibly in order to stabilize the exchange rate and support businesses, especially those with large foreign debt.

As of March 18, the short-term interbank interest rate had remained above 2 per cent for seven consecutive weeks, and was double the rate at the end of 2021 and up 5-6 times over the same period last year. According to SSI Securities, the main reason for the high interbank interest rate is the recovery of credit, which has cut into bank liquidity.

According to analysis from VnDirect, oil prices will cool by the end of the year and gradually decline as additional supply from Iran, the US, and OPEC countries meet demand. Caution is needed with oil and gas stocks at the moment, because the risks outweigh any upside. Investors should focus attention on oil and gas stocks that are less sensitive to prices and associated with the long-term development of the industry.

Inflationary pressure and the Russia - Ukraine conflict have contributed to foreign investors leaving Vietnam’s stock market recently, offloading nearly VND7 trillion ($307.7 million) in shares since the beginning of March. But many analysts believe withdrawals will slow and then return as foreign investors recognize that economies like Vietnam’s will benefit from the greater economic openness to come.