Weekly Information on Banking Activities (April 9-15, 2009)

The weekly information on banking activities (April 9-15, 2009) is as follows:

1. The Governor the State Bank of Vietnam (SBV) promulgated, on April 10, Decision No. 837/QD-NHNN on reducing the refinancing rate, the discount rate, 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. Accordingly, the aforesaid rates are cut by 1 percentage point p.a. in comparison with the rates set in Decision No. 173/QD-NHNN dated January 23, 2009, respectively.

2. The money market remained stable. The commercial banks’ deposits in SBV were adequate to meet the reserve requirements and solvency.

- The VND mobilizing interest rate of the Vietnam Bank for Industry and Trade (Vietinbank) and the Mekong Delta Housing Development Bank (MHB) slightly increased with a rise between 0.1-0.4 percentage point p.a. in most terms. While the rate of joint-stock commercial banks was up by 0.1-0.2 percentage point p.a. for the terms below 12 months.

- The mobilization interest rate in USD offered by the Bank for Investment& Development of Vietnam (BIDV), Vietinbank, and the Joint-Stock Commercial Bank for Foreign Trade of Vietnam (Vietcombank) reduced between 0.1-0.6 percentage point p.a. in comparison with the previous week, excluding BIDV’s mobilization interest rate in USD at the maximum level of 2% p.a.

The rates are quoted as follows:

- The lending rates in VND of the group of state-owned commercial banks remained unchanged in comparison with the previous week, commonly at 8.5%-10% p.a. for short-term loans and at 10%-10.5% p.a. for the medium and long-term loans in VND.

- The common lending rates in VND of the group of joint-stock commercial banks remained stable, commonly at 10% - 10.5% p.a.

- The lending rate in USD ranged between 6%-7% p.a.

BIDV, Vietinbank, MHB and Vietcombank adjusted the lending rate applicable to the past credit contracts down to the current lending rate of 10.5% p.a. as set by SBV.

3. According to the express reports of credit institutions, by April 14, 2009, the average interest rates in VND in the inter-bank market tended to increase slightly for the short terms (overnight and 1 week), the average interest rates for other terms (2 weeks, 1 month, 3 months, 6 months and 12 months) tended to decrease slightly in comparison with the previous week, particularly the 12 month term rate remarkably decreased by 1 percentage point p.a. The overnight rate is 6.53% p.a., the other rates range between 7.2%-8.35% p.a.

The average interest rates in USD were on a downward trend for most time loans, especially the 1 month rate remarkably declined by 0.46 percentage point p.a. as compared to the previous week. The highest rate was 1.75% p.a. for 3 month loans and the other rates fluctuated between 0.4%-1.1% p.a. There were no transactions for 6 month and 12 month loans.

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

4. During the week, commercial banks quoted the selling VND/USD exchange rate closely to the ceiling rate set by the SBV. Commercial banks commonly offered their selling VND/USD exchange rate at 17,783-17,786 VND/USD. The SBV closely watched the developments in the market, and managed the exchange rate flexibly to control trade deficit and stabilize macro-economy.

5. SBV Management Board’s activities

- Governor Nguyen Van Giau, on April 11-14,  had a meeting with the People’s Committees  of Phu Tho and Thai Nguyen Provinces with the aim of reviewing the implementation of Resolution No.30/2008/NQ-CP of the Government dated December 11, 2008 on urgent measures of preventing economic decline, maintaining growth rate and secure social protection.

- Deputy Governor Nguyen Toan Thang, on April 15, met with the visiting Australian Business Delegation led by Mr.Richard Woolcott AC, Founding Director of the AustralAsia Society Center, and Mr.Charles Goode, Chairman of the ANZ Bank.

- Deputy Governor Nguyen Dong Tien, on April 16, attended the Conference of the SBV Ho Chi Minh Communist Youth Union.

- Governor Nguyen Van Giau, on April 17, joined  Mr. Ayumi Konishi, ADB’s Country Director for Vietnam in signing loan agreement for the comprehensive socio-economic development project of Thanh Hoa City.

Thu Huong

sbv

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