Two liquidity measures pave the way for lower interest rates

Within just one week, the State Bank of Vietnam (SBV) introduced two measures to supply Vietnamese dong (VND) to the banking system, signaling its intention to strengthen liquidity and bring down interest rates.

Most recently, the central bank announced a plan to purchase US dollars on the spot market at an exchange rate of VND25,500 per USD. The transactions are expected to take place regularly on Mondays and Wednesdays, starting November 11.

Earlier, on November 6, the SBV injected nearly VND48.8 trillion into the banking system through 182-day USD/VND swap transactions, with a maximum transaction value of $2 billion.

Under the arrangement, participating banks will repurchase US dollars at maturity at an exchange rate of VND24,704 per USD.

Notably, the 182-day tenor is significantly longer than those used in previous liquidity support operations.

These measures followed the SBV's directive urging credit institutions to lower lending rates, targeting reductions of 1.5–2 percentage points annually for production, business activities and priority sectors.

Luu Chi Khang, Director of the Research Center at Kirin Securities, described the latest measure as a foreign exchange market intervention designed to regulate the supply of VND to the banking system.

He identified four main channels through which the policy could affect financial markets.

First, the central bank's purchases of foreign currency inject additional VND into commercial banks, improving system-wide liquidity.

Second, unlike currency swaps, spot purchases do not require commercial banks to repurchase US dollars at a specified future date.

As a result, the VND injected through these transactions is not subject to a mandatory repayment deadline, effectively representing a direct liquidity injection.

Third, improved banking liquidity could help ease overnight interbank interest rates and rates across other maturities.

Fourth, the transactions allow the SBV to increase its foreign exchange reserves while managing exchange rate movements.

Businesses expected to benefit as Vietnam targets 10% GDP growth

The central bank's decision to purchase US dollars comes after several months of declining USD/VND exchange rates.

On the unofficial market, the US dollar fell from approximately VND28,150 in late March to around VND26,000 in early November.

Meanwhile, many banks have increased their foreign currency borrowing.

Foreign direct investment inflows have also remained strong.

During the first 10 months of 2026, registered FDI reached $54.85 billion, up 74% year on year and the highest level in 17 years.

According to Khang, the immediate impact of the central bank's latest measures is likely to be most visible in the interbank market, particularly in overnight lending rates and other short-term maturities.

For the stock market, the measures represent a positive signal.

Historical data show that between February 2016 and May 2023, the SBV conducted eight rounds of spot US dollar purchases. The VN-Index rose within the following month on seven of those occasions.

This historical pattern has raised expectations that Vietnamese equities could respond favorably to the latest policy moves.

At the same time, West Texas Intermediate (WTI) crude oil prices fell another 1.1% on the morning of November 10 to $85.90 per barrel.

Domestic fuel prices have also benefited from measures reducing taxes and fees.

Together, lower financing costs and reduced energy expenses could help businesses improve their profit margins.

Manufacturing, industrial production, consumer goods and transportation companies are among those expected to benefit directly.

Major corporations implementing large-scale projects in priority sectors could also gain from easier access to financing.

These developments are expected to provide additional support for Vietnam's target of achieving 10% GDP growth.

VN-Index jumps as blue-chip stocks rally

Lower interest rates generally support stock valuations by reducing the discount rates applied to future cash flows and increasing the relative attractiveness of risk assets.

As a result, investors may shift capital toward stocks that have experienced significant price corrections, including banking, securities, manufacturing, consumer goods and selected real estate shares.

By 10 a.m. on November 10, the VN-Index had climbed more than 25 points, or 1.5%, to 1,740 points.

Vingroup (VIC) shares rose VND3,600 to VND238,000 each, while Vinhomes (VHM) gained VND1,800 to VND62,000.

Hoa Phat Group (HPG) advanced VND400 to VND21,300 per share.

Nearly all 30 major stocks in the VN30 basket recorded gains.

According to the Kirin Securities expert, improved banking liquidity could help stabilize funding costs, creating room for commercial banks to reduce lending rates.

However, the recovery is unlikely to be uniform across sectors and companies.

Individual stock performance will continue to depend on corporate earnings prospects and financial health.

Overall, the SBV's two liquidity measures are strengthening the conditions needed to translate its interest rate reduction policy into practice.

If banking liquidity remains ample, the exchange rate stays stable and credit flows into production and business activities, the measures could provide an important boost to companies in the final months of the year.

They could also help establish more favorable financial conditions for Vietnam's pursuit of double-digit economic growth.

Manh Ha