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Vietnam central bank chief rules out lowering bank reserve ratio
Vietnam’s central bank will keep the compulsory reserve ratio for lenders unchanged for the time being to slow inflation, Governor Nguyen Van Giau said.
The State Bank of Vietnam has raised interest rates three times this year to slow an overheated economy and battle high inflation.
Signs that gains in consumer prices may have reached their peak have fueled speculation the central bank will lower borrowing costs.
The central bank lifted the amount of deposits lenders must keep aside to 11 percent from 10 percent on Jan. 16, the first increase since June 2007.
Policy makers also increased the benchmark interest rate to 14 percent in June, Asia’s highest.
“The reserve requirement will not be changed, I can assure you,” Giau told journalists at a conference in Hanoi today.
“In order to fight inflation, we have to pursue a tight monetary policy.”
“Cutting the reserve requirement means loosening our monetary policy, and that’s not what we are going to do for now,” Giau said.
“The Prime Minister has told us to try to bring inflation down to one digit by the end of next year.”
Gains in consumer prices will probably slow after reaching their highest level of 28.4 percent in September, according to HSBC Holdings Plc.
Vietnam’s four biggest lenders last month cut interest rates from as high as 21 percent, responding to concerns from companies that they won’t have enough cash to keep up production.
Thanhnien
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