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Interbank interest rates drop as T-bills continue to expire, not replaced

Inter-bank interest rates have started to decrease after reaching a three-month high last week, Vietnam Biz is reporting. Last Thursday they hit 1.89 percent, down from 2.22 percent the Monday before.

Why it matters: Inter-bank interest rates were one measure that was being used to assess the success of the issuance of a number of T-bills by the State Bank of Vietnam. As the T-bills have matured, however, they have only been partially replaced. This has led to more dong in the market and the problems that the T-bills were supposed to resolve, are now returning–note that the aforementioned article floats the idea of the SBV selling US dollars as an alternative to issuing more T-bills.

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