Weekly Information on Banking Activities (September 18th – 24th, 2008)

Last week, the domestic monetary market remained stable. Many commercial banks reduced the mobilizing rate thanks to the positive development of CPI of September, 2008.

- According to the express reports of credit institutions, as of September 23^rd,2008, the average term interest rates in VND in the inter-bank market tended to decrease as compared to the previous week. The average term interest rate in USD was comparatively stable.  Following are the specific rates : the average overnight rate is 13.53% p.a., and  the average  term rates of 1 week, 2 weeks, 1 month, 3 months, and 6 months  are 14.44% p.a., 15.3% p.a., 16.21% p.a., 15.93% p.a., 18.41% p.a. respectively.

- Mobilizing rates of commercial banks  are commonly listed as below :

- Lending rates : (%/year)

- At the beginning of the week, the exchange rate of USD/VND depreciated slightly due to the development in the international financial markets. The rate in commercial banks at times rose to 16,740 VND/USD. However, the exchange rate has returned to normal, ranging from 16,590 to 16,640VND/USD. The exchange rate in the parallel market remained stable at 16,600-16,500VND/USD after depreciating slightly. The SBV would continue to closely monitor the development in the financial market so as to make timely intervention.

- Implementing the monetary policy in a tight but flexible manner to contain inflation and stabilize macro-economy in the spirit of Decree No.20/2008/NQ-CP dated September 25^th, 2008, the SBV Governor has issued the following regulatory documents :

+ Decision No.2131/QĐ-NHNN dated September 25^th, 2008 maintaining the prime interest rate of 14% p.a. as already regulated in Decision 1906/QD-NHNN dated 29 August 2008.

+ Decision No. 2132/QD-NHNN amending Decision No. 346/QD-NHNN dated 13 February 2008 on the issuance of the compulsory SBV bills, stipulating that compulsory SBV bills issued on 13 March 2008 can be used as mortgage for borrowing and discounting at the SBV and as instruments in the Open Market Operations (OMOs) run by the SBV in accordance with  law.

+ Decision No. 2133/QD-NHNN increasing the interest rate up to 5% p.a. for VND reserve requirement applicable to credit institutions. This decision is to replace Decision No. 1907/QD-NHNN dated 29 August 2008.

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