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The monetary market bounces back
The strong measures introduced by the State bank of Vietnam (SBV) to stabilise the monetary market have begun to pay off, with borrowing interest rates and exchange rates of foreign currencies being kept in check.
Last week, the annual borrowing interest rates of State commercial banks were adjusted to around 17-18 percent while those of joint stock banks varied between 18-18.5 percent.
According to the SBV, the rates being offered by the banks have equalled out and in some cases have even fallen by between 0.5-1 percent. The 20-percent rate – the highest offered by several banks to lure depositors – has dropped to 19 percent.
On the inter-bank market, the interest rates have also declined to 19.85 percent per annum for one-week deposits and 17.43 percent per annum for overnight deposits. However, the interest rate for two-week deposits has increased slightly to 20.59 percent per annum.
The exchange rate between the Vietnamese Dong (VND) and the US dollar (US$) has also turned a corner to keep pace with the market law of supply and demand.
After the exchange rate shot up on the black market to stay at around VND19,000/1US$ just a week ago, the State Bank of Vietnam decided to adjust the trading band of VND/US$ at +/-2 percent, immediately forcing the rate on the black market to fall by 2.25 percent to between VND17,400-17,500/1US$.
Specialists believe that the State bank’s measures to adjust interest rates and the exchange rate will help the monetary market operate in a healthier manner.
In addition to a recently established hotline, the SBV has asked its affiliates to keep a close watch on the developments of the monetary market and to intervene with timely solutions. It has also asked its affiliates to sell foreign currencies to commercial banks to meet the demands of the country’s economy. The SBV’s affiliates have also been directed to ensure that an adequate supply of capital is available for essential economic sectors to reach their production and export targets.
The SBV says that it will provide up-to-date information about developments in the market and its decisions to help banks, economic sectors and the public to draw up appropriate business plans.
VOV
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