Weekly Information on Banking Activities (April 2 – 8, 2009)

The weekly information on banking activities (April 2 – 8, 2009) is as follows:

1. The Governor of the State Bank of Vietnam (SBV) issued Decision No.790/QĐ-NHNN on the interest rate applicable to excessive amount of reserve requirement in foreign currencies of credit institutions and the State Treasury’s foreign currency deposits with the SBV.

Accordingly, from April 3, 2009, the SBV will pay credit institutions an interest rate of 0.1% p.a on the excessive amount of reserve requirement in foreign currencies, and an interest rate of 0.1% p.a to the State Treasury’s foreign currency deposits with the SBV.

This new interest rates  replaced the rates stipulated Decision No. 3281/QD-NHNN dated December 31, 2008 on interest rate applicable to excessive amount of reserve requirement in foreign currencies of credit institutions and the State Treasury’s foreign currency deposits with the SBV

2. On April 7, the SBV Governor issued Circular No.05/2009/TT-NHNN to stipulate detailed guidance on the excution of interest rate support for medium and long-term loans to corporate and individual borrowers to invest in new projects of production and business, aiming at implementing Decision No. 443/QĐ-TTg  of the Prime Minister dated April 4th, 2009.

3. Mobilizing rate remained stable. The rates are quoted by April 9th, 2009 as follows:

The lending rates remained stable as compared to the previous week. The lending rates in VND of the group of state-owned commercial banks for short-term, and medium and long term were commonly quoted at 8.5% - 10%, and 10%-10.5% p.a respectively. The common lending rates in VND of the group of joint-stock commercial banks were 10% - 10.5% p.a. The lending rates in USD were offered at 6%-7% p.a.

4. According to the express reports of credit institutions, by April 7th, 2009, the average term interest rates in VND in the inter-bank market were on upward trend for most of the terms (overnight, 1 week, 2 weeks and 12 months); excluding the rate of 3 month remained unchanged and the 1 month and 6 month term rate slightly decreased as compared to the previous week. The 12 month term rate  most remarkably increased  by 2.5% p.a. The average overnight rate was 6.46% p.a., the rates of other terms ranged between 7.2%-9% p.a.

The average interest rates in USD were on downward trend for almost terms, except 3-month term loans (an increase by 0.74% p.a. in comparision with the previous week). The highest average interest rate in USD was 2.13% p.a (3 month term), the rates of other terms ranged between 0.4%-1.2% p.a. There was no transaction for 3 month and 6 month term loans.

The average interest rates in the inter-bank market were as follows (% p.a):                                                                                                                        

5. During the week, commercial banks quoted the selling USD/VND exchange rate closely to the ceiling rate set by the SBV. Commercial banks commonly offered their selling USD/VND exchange rate at 17,785-17,790 USD/VND. The buying USD/VND exchange rate was commonly quoted at 17,720-17,770 USD/VND. The SBV closely watched the developments in the market, managed the exchange rate flexibly to stabilize macro-economy.

6. SBV Management Board’s activities

- SBV Governor Nguyen Van Giau attended the 5th ASEAN Central Bank Governors' Meeting (ACGM) and the 13th ASEAN Finance Ministers' Meeting (AFMM) in Pattaya, Thailand, from April 7 to April 9. The meetings were held prior to the the East Asia Summit (EAS) with the aim of strengthening the region’s coorperation, discussing the practical regional and global economic situation, and finding out the measures to cope with the current global financial and economic crisis.

- Deputy Governor Nguyen Van Binh met with two international rating agencies: Moody’s and Fitch on April 2 and April 8.

- on April 9th, 2009, SBV convened conference on the implementation of Decision No.443/QĐ-TTg of the Prime Minister dated April 4th, 2009 on interest rate support for VND medium and long term loans for the business and productive corporate and individual borrowers. The conference was attended by Senior Deputy Governor Tran Minh Tuan, Deputy Governor Nguyen Dong Tien , Deputy Governor Nguyen Toan Thang and several SBV department directors and senior leaders of Vietnam Development Bank and representatives of credit institutions.

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