Money market in March: Exchange rate rises, State Bank of Vietnam implements intervention measures, interest rates rise across the board

During March, the money market saw notable developments as the U.S. dollar strengthened again, increasing pressure on domestic exchange rates. In response, the State Bank of Vietnam actively managed liquidity through selling forward foreign exchange and draining VNĐ liquidity. Accordingly, deposit rates and interbank rates rose across the board.

Dollar strength and global drivers

The USD rose the most in eight months, with the DXY index climbing to 100.51 by the end of March, up 3% from February and higher by 2.3% from the start of the year.

The main drivers were the escalation of the conflict in the Middle East, which raised the risk of energy-supply disruption and pushed global oil prices higher from early March. At times, oil prices neared $120 per barrel—the highest in four years. Because energy is priced in USD, the rise in energy prices supported the greenback. At the same time, rising inflation pressures led markets to adopt a more cautious stance regarding the pace of monetary easing by the Fed.

Fed expectations and interest-rate backdrop

According to FedWatch, expectations for rate cuts this year were nearly nullified, while the timing of the next cut was pushed back to October 2027. Previously, on March 18, the Fed kept the federal funds rate at 3.5%–3.75% as inflation pressure persisted and geopolitical risks increased.

Vietnam: FX pressure and State Bank interventions

Domestically, the stronger USD pushed up the USD/VND rate in March. The interbank rate rose by 1.1% month-on-month to 26,345 VND/USD, while the central rate inched up 0.2% to 25,102 VND/USD.

Pressure on the FX rate also stemmed from trade factors as the merchandise deficit continued at about $0.53 billion in the first half of March, lifting the year-to-date import gap to $3.51 billion as of March 15.

To respond, the State Bank actively intervened by selling USD forwards with a 180-day maturity (non-cancellable) to banks with negative FX positions at 26,850 VND/USD. The measure helped stabilize market sentiment and preserve foreign exchange reserves in case FX pressures ease and unwind, including the unwind of prior transactions. The regulator had also implemented USD forward sales three times in 2025 to ease FX market pressures.

Liquidity tightening: OMO withdrawal and money-market rates

In the money market, after Tet, the State Bank shifted to a net drain as liquidity pressure waned. In March, total liquidity injected via OMO was about 491.3 trillion VND, while maturities reached over 605.8 trillion VND, corresponding to a net withdrawal of about 114.6 trillion VND—the highest since October 2024. As a result, the scale of OMO in circulation dropped to over 290 trillion VND.

This translated into pronounced moves in the interbank market. The overnight rate fell sharply in the first half of the month, from 10.5% to 3.7% by March 16, before rebounding to 9.3% by month end. The 1-week rate rose to 8.9%, while longer tenors (1–6 months) increased only mildly, hovering around 7.6%–7.9%.

Deposit rates: continued upward trend

In the deposit market, the trend of rising deposit rates continued in March, not only at smaller banks but also across the Big4. Nominal deposit rates rose mainly for tenors of six months or longer, with ranges of 0.1%–1.4%.

Practical surveys also indicated that deposit rates at many banks are notably higher than published, with some banks offering as high as 9% per year for six-month tenors or longer.

As of early March to date, more than 20 banks have raised deposit rates, including VPBank, Sacombank, VietBank, MB, SHB, NCB, Techcombank, VietinBank, BIDV, Vietcombank, Agribank, and others; many banks carried out 2–4 hikes.