Weekly Information on Banking Activities (June 25-July 1, 09)

 The weekly information on banking activities (June 25 – July 1, 2009) as follows:

1. The Governor of the State Bank of Vietnam (SBV) issued Decision No. 1539/QĐ-NHNN on June 30 on keeping the base interest rate unchanged at 7% p.a. The decision took effect on July 1st. The same day, the SBV also announced several interest rates to be applicable from July 1st; including the refinancing interest rate of 7% p.a., the discount rate of 5% p.a., and the overnight rate of 7% p.a. in the inter-bank electronic payment and of loans to finance short balances in clearing transactions between SBV and commercial banks.

2. The VND mobilizing rate was stable, in particular, the SaiGon – HaNoi Commercial Joint-Stock Bank increased the rate by 0.2 - 0.4 percentage point p.a.. The highest mobilizing rate in VND was 10.2% p.a. offered by the Vietnam Tin Nghia Joint-Stock Commercial Bank for the 36 months term. The mobilizing rate in USD was stable compared to the previous week.

The average mobilizing rates were as follows:  

- The lending rates in VND remained stable as compared to the previous week. The lending rates in VND of the group of the state-owned commercial banks for short, and medium and long terms 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 after deducting the amount of interest rate subsidy were from 4.5% to 6% p.a. The negotiable lending rates applicable for personal and credit card loans were commonly at 12% - 16.5% p.a.

- The lending rates in USD were comparatively stable against the previous week. The lending rates in USD of the group of the state-owned commercial banks for short, and medium and long terms were commonly quoted at 3% p.a., and 3.5% - 5% p.a. respectively. The group of joint-stock commercial banks commonly offered their lending rates in USD for short term, and medium and long term at 3% -5% p.a., and 4%-6% p.a. respectively.

3. According to the express reports of credit institutions, the average term interest rates in VND in the inter-bank market were on a downward trend for 1 month, 6 months and 12 months terms with the maximum decrease of 0.77 percentage point p.a. for 12 months term; the average rates for other terms (overnight, 1 week, 2 weeks, 3 months) were on a upward trend with the increases below 0.3 percentage point p.a.. The average overnight rate was 5.73% p.a., an increase of 0.29 percentage point as compared to the previous week. The rates of other terms ranged between 6.6% to 8.45% p.a.

The average interest rates in USD in the inter-bank market were on a slight upward trend for overnight and 2 weeks term, while the rates for other terms (1 week, 1 month, 3 months) were on a downward trend with the changes ranging between 0.03% - 0.21% percentage points p.a.. The highest average interest rate in USD was 1.9% p.a. for 6 months term, and the rates of other terms ranged between 0.45%-1.75% p.a.

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

4. During the week, the VND/USD exchange rate, offered by commercial banks, was close to the ceiling rate set by SBV, commonly at 17,800-17,804 VND/USD. As a matter of fact, several credit institutions recently traded foreign exchange at a rate higher than the ceiling rate set by SBV. In this context, the Governor of the State Bank of Vietnam (SBV) sent Official Letter No. 4941/NHNN-QLNH on July 1st to CEOs of the credit institutions with foreign exchange license to redress their foreign exchange trading in line with the existing regulations. Additionally, the SBV closely watched the developments in the market, managed the exchange rate flexibly and implemented necessary measures to facilitate active operations of the foreign exchange market.

5. SBV Management Board’s Activities

- On June 26, Prime Minister (PM) Nguyen Tan Dzung paid a working visit to the State Bank of Vietnam (SBV) in order to get the knowledge of performance of the banking sector in the first half of 2009 and to provide guidance for the implementation of the monetary policy in the second half of the year. The meeting was also attended by Senior Deputy Prime Minister Nguyen Sinh Hung, leaders of several Ministries and central agencies, and Chairmen of the Board of Directors and General Directors of the state-owned commercial banks and the Vietnam Development Bank.

- On June 26, the Governor had a meeting with Mr. Sun Vithespongse, Executive Director of the World Bank (WB).

- On June 30, the Governor had a meeting with Mr. Ratubatsi Super Moloi, Ambassador of the Republic of South Africa to Vietnam.

- On June 30, Governor Nguyen Van Giau and Mr. Ayumi Konishi, Country Director for Vietnam of the Asian Development Bank (ADB), signed a loan agreement for the “Quality and Safety Enhancement of Agricultural Products and Biogas Development Project”. The project is worth USD 95 billion.

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