Vietnam’s central bank injects nearly VND 50 trillion into banking system through foreign exchange swaps
The State Bank of Vietnam has launched a six-month foreign exchange swap operation with an initial scale of $2 billion. An official said it provided the banking system with nearly VND 50 trillion in additional funds on November 9, helping ease liquidity pressure and creating conditions for lower lending rates.
Nguyễn Linh Phương, Deputy Director of the Monetary Policy Department at the State Bank of Vietnam, said the bank recently launched a six-month foreign exchange swap operation with an initial scale of $2 billion. On November 9, the operation provided the banking system with nearly VND 50 trillion in additional funds.
Nguyễn Linh Phương, Deputy Director of the Monetary Policy Department at the State Bank of Vietnam.（VietVance）
Nguyễn Linh Phương said the foreign exchange swaps help credit institutions balance funding and maintain Vietnamese dong liquidity over a longer period, especially around the end of the calendar year and the Lunar New Year. She said the operation also supplies the banking system with Vietnamese dong funds at a lower cost, creating conditions for stable and lower lending rates.
She said that after the State Bank of Vietnam announced the operation, the six-month foreign exchange swap rate in the interbank market fell to a level comparable to the bank’s quoted rate. Swap rates for terms of three months or longer also trended downward. In her view, these changes show that the measure has begun to take effect and is helping stabilize market expectations.
As for the next steps, Nguyễn Linh Phương said the State Bank of Vietnam will continue monitoring macroeconomic and money market developments, using tools such as open market operations, refinancing and foreign exchange swaps as appropriate. It will also coordinate interest rate, exchange rate and credit policies to maintain adequate liquidity while supporting foreign exchange market stability and inflation control.
Source: VietVance
