Weekly Information on Banking Activities (Apr.29-May 6, 09)

The weekly information on banking activities (April 29 – May 6, 2009) is as follows:

1. To implement Decision No.497/QD-TTg of the Prime Minister dated April 17, 2009, the State Bank of Vietnam (SBV), on May 5, 2009, issued Circular No. 09/2009/TT-NHNN stipulating detailed regulations on supporting interest rate loans for procuring instruments and material for agricultural production and rural housing development.

Under this Circular, the State will provide interest rate support for VND short and medium-term loans for institutional and individual borrowers to procure instruments and material for agricultural production and rural housing development with the aim of helping them reduce investment expenses, improve productivity and promote industrial development by the means of stimulating investment and consumption in the rural areas.

2. The money market was stable. Several commercial banks namely Housing Development Commercial Joint-Stock Bank (HD Bank), Sai Gon- Hanoi Commercial Joint-Stock Bank (SHB), Ocean Commercial Joint-Stock Bank (OCB) increased the mobilizing interest rates in VND for the terms of above 12 months by 0.2 – 0.5 percentage point. The mobilizing rates are commonly around 8.5% to 9% p.a. In addition, commercial banks started to provide promotion programs in order to attract savings from customers, thereby increasing capital source in VND.

The mobilizing rates in USD of the group of state- owned commercial banks and the group of joint-stocks commercial banks remained stable; the mobilizing interest rates in USD offered by the Vietnam Technological and Commercial Joint-Stock Bank (Techcombank) reduced by 0.1-0.3 percentage point p.a. in most terms of loans.

The average mobilizing rate is quoted from May 4- 7, 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% p.a, and 10%-10.5% p.a respectively. The group of joint stock commercial banks commonly offered their lending rates in VND from 10 % - 10.5% p.a. The lending rates in USD were from 6% to 7% p.a. The negotiable lending rates applicable for  consumer demand and credit card loans were commonly at 12% - 15% p.a.

3. According to the express reports of credit institutions, by May 5th, 2009, the average term interest rates in VND in the inter-bank market were on downturn trend for most of the terms; excluding the rate of overnight and 2 week slightly increased as compared to the previous week. The 12 month term rate remarkably decreased by 0.37% p.a; the average overnight rate was 6.14% p.a., the rates of other terms ranged between 6.8%-8.2% p.a.

The average interest rates in USD were on upward trend for almost terms, except overnight rate slightly decreases (a decline was 0.06% p.a. in comparison with the previous week). The highest average interest rate in USD was 3.57% p.a for 6 month term, the rates of other terms ranged between 0.4%-3.0% p.a.             

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

4. During the week, commercial banks quoted the selling USD/VND exchange rate closely to the ceiling rate set by the SBV, commonly at 17,785-17,788. The SBV closely watched the developments in the market to conduct proper measures in order to stabilize macro-economy.

5. SBV Management Board’s activities

Governor Nguyen Van Giau of the State Bank of Vietnam (SBV) led the SBV delegation to attend the 42nd Annual Meeting of the Board of Governors of the Asian Development Bank (ADB) in Bali, Indonesia, from May 2 to May 5.

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