Weekly Information on Banking Activities (September 25th – October 1st, 2008)

Last week, the domestic monetary market remained stable and the liquidity of the banking system was adequate in spite of  continuous turmoil in the US and global financial and credit markets. Under the instructions of the Government, SBV continued to closely monitor the development in the global financial and credit markets in order to carry out timely and appropriate measures to ensure the safety of the banking system and contribute  to  macro-economic stability.

- According to the express reports of credit institutions, as of September 30^th, 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 in VND is 11.97% p.a. and the average term rates of 1 week, 2 weeks, 1 month, 3 months, and 6 months are 13.34% p.a., 14.72% p.a., 16.68% p.a., 18.33% p.a., 17.05% p.a., 14.18% p.a. respectively.

- After the issuance of Decision No.2131/QĐ-NHNN of September 25^th, 2008 by the SBV Governor to increase the interest rate from 3.6% to 5% p.a. for VND reserve requirement applicable to credit institutions, the State-Owned Commercial Banks (SOCBs) and the Joint-Stock Bank for Foreign Trade of Vietnam (VietComBank)  started to reduce their lending rates by 0.5% to 1.8% as compared to their previous quotes.

On this occasion, joint-stock commercial banks, joint-venture banks and branches of foreign banks also considered to decrease their lending rates with preferential treatment being given to  those enterprises involved in export and food trading, SMEs, and effective projects.

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

- Lending rates : (%/year)

- Last week, the exchange rate of USD/VND remained stable.  Commercial banks quoted their exchange rates below the ceiling rate prescribed by SBV by 205-235VND/USD. Differences between bid and offer prices ranged from 40 to 50 VND/USD. The rate was quoted at 16,570-16,620VND/USD by commercial banks, and 16,600-16,500VND/USD in the parallel market.

                                                                                                                                SBV

>   Swimming in a turbulent sea of change (09/10/2008)

>   Fed and six other central banks slash interest rates (09/10/2008)

>   Lower interest rates aren’t making businesses happy (08/10/2008)

>   Vietnam-Russia Bank to open rep. office in Russia (08/10/2008)

>   SBV Governor meets with JICA Representative (08/10/2008)

>   Government strikes meaty blow for farmers (08/10/2008)

>   New banks to face stiff regulations (08/10/2008)

>   Banks say ‘no’ to polluting businesses (08/10/2008)

>   ACB accepts JCB cards (08/10/2008)

>   Petrol price cut by VND500/litre (07/10/2008)