Interbank interest rates rose sharply.

Since the beginning of this week, VND interest rates in the interbank market have been continuously rising, and the system's surplus capital is no longer as abundant as it was before the beginning of the fourth quarter of 2017.

Interbank interest rates rose sharply.

During the peak business season at the end of the year, credit demand typically increases sharply, and the rate of capital utilization in the primary market by banks accelerates.

According to updates from Maritime Bank's Economic Research Center, as of November 15th, VND interest rates have seen a significant breakthrough in the interbank market, far exceeding the low interest rate range of below 1% per year seen in previous months.

Specifically, the average VND lending rate in the interbank market on November 15th increased by 18-25 points compared to the previous session. The overnight rate reached 1.9%/year, the 1-week rate was 2%, the 2-week rate 2.22%, and the 1-month rate 2.48%. These are the highest interest rates since June 2016.

Along with the aforementioned interest rate developments, the system's overall capital surplus has decreased. This is partly due to the market entering the peak production and business season at the end of the year, with credit demand typically increasing sharply in the final months of the year, and banks accelerating the rate of capital utilization in the primary market.

Reflecting this situation, the amount of State Bank of Vietnam bills issued to absorb excess liquidity has clearly decreased in recent sessions. On November 15th, the central bank only successfully issued 200 billion VND worth of bills with a 1-month maturity and an interest rate of 1.5%. For the 2-week maturity, the State Bank of Vietnam offered a bid interest rate of 0.7%, but no bidders expressed interest.

The volume of outstanding State Bank of Vietnam bills as of November 15th decreased to VND 53,270 billion, meaning the amount of temporarily "stored" capital has decreased compared to the nearly VND 90,000 billion worth of bills in the third quarter of 2016.

According to VnEconomy