|
Weekly Information on Banking Activities (October 16th – October 22nd , 2008)
Implementing the instruction of the Government on curtailing inflation, proactively mitigating impacts of the global financial crisis, stabilizing macro-economy, maintaining sustainable development while ensuring mobilization and liquidity of credit institutions, the Governor of the State Bank of Vietnam (SBV) has issued the following regulatory documents:
+ Decision No.2316/QD-NHNN dated October 20th 2008 on cutting down the VND-denominated prime interest rate to 13% from 14%;
+ Decision No.2321/QD-NHNN dated October 20th 2008 on hiking yield of reserve requirement level applicable to credit institutions from 5% up to 10%;
+ Decision No.2318/QD-NHNN dated October 20th 2008 on reducing the refinancing rate to 14% from 15%, discount rate from 13% to 12%, and the overnight rate in the inter-bank electronic payment and the rate of loans to finance short balances in clearing transactions between SBV and commercial banks to 14%p.a from 15% p.a.;
+ Decision No.2317/QD-NHNN dated October 20th 2008 on the prepayment of the compulsory SBV bills worth VND 20,300 billion at the request of credit institutions, starting from October 21st.
-After the issuance of the aforesaid decisions, many banks adjusted VND mobilizing and lending rates as follows:
+ Lending rates of the state-owned commercial banks and the Joint-Stock Commercial Bank for Foreign Trade of Vietnam (Vietcombank) declined by 0.5 – 1.7 percent p.a in comparison with the maximum lending rate set by SBV (19.5 percent p.a). The common maximum lending rate of this group is 18% p.a (the Bank for Investment and Development of Vietnam, BIDV, offers the maximum rate of 19% p.a. for its long term loans); the rate for priority customers ranged from 16.8% to 17.2% p.a. The lending rates of BIDV decreased sharply as of October 23rd, 2008. The Vietnam Bank for Agriculture and Rural Development (VBARD) has quoted its short-term maximum lending rate of 18.5% p.a. to ordinary borrowers, and the rate of 16.8% p.a. for production households, exporters and other reputed clients.
+ Lending rates of the joint-stock commercial banks were adjusted below 19.5% p.a.; the rate for exporters and other reputed clients was lower than the maximum lending rate regulated by SBV by 0.5%-1% p.a.
- During the week, the domestic money market remained steady. According to the express reports of credit institutions, by October 20th, 2008, the average term interest rates in VND in the inter-bank market tended to decrease as compared to the previous week, particularly with the term under 1 month. Specifically, the average overnight rate in VND is 10.98% p.a. and the average term rates of 1 week, 2 weeks, 1 month, 3 months, 6 months, and 1 year are 12.04% p.a., 12.33% p.a., 15.16% p.a., 16.58% p.a., 17.00% p.a. and 14.45% p.a. respectively.
- The USD/VND exchange rate tended to appreciate. Commercial banks quoted their exchange rates close to the ceiling rate prescribed by SBV. The USD/VND rate was quoted at 16,820-16,870 in the parallel market.
- The USD/VND exchange rate was up with the trend of USD appreciation in the international market. There were several factors affecting the exchange rate, namely SBV adjustments of interest rates, the prepayment of the compulsory SBV bills, and commercial banks with excessive VND liquidity wishing to improve their forex position. As such, SBV has been closely monitoring the changes in the Vietnamese forex market in order to make timely intervention if necessary.
- Vietcombank and BIDV, which make up the lion shares in the Vietnamese forex market, on October 23rd, 2008 announced at a press conference their commitment to provide sufficient foreign currencies to the market. The same day, BIDV sold USD 45 million to customers and other commercial banks.
SBV
|
