Investor group urges cap for forex deposit interest

The central bank should cap interest rates on foreign-currency deposits to rein in the rise in the value of the currencies, according to the Vietnam Association of Financial Investors.

The association wants the State Bank of Vietnam to initially bring down the rates to 3-3.5 percent from around 5 percent that most banks offer now.

The most suitable time for the cut will be February next year, it said.

The central bank should also review its policy of providing loans in foreign currencies to exporters since this drives up demand, it pointed out.

It is partly as a result of this that banks are forced to raise their foreign-currency deposit rates to attract deposits, in turn pushing up free market exchange rates, the association added.

tuoitrenews

>   Banks fall short of profit targets (28/12/2010)

>   Weekly information on banking activities (Dec 11–17, 2010) (27/12/2010)

>   Vietnam's bad debt hits 2.5 pct in 2010: Report (27/12/2010)

>   ADB offers $100 mln loan for Vietnam business development (27/12/2010)

>   Black market capital blocking small businesses (25/12/2010)

>   Foreign lenders rush to raise registered capital (24/12/2010)

>   Vietnam credit rating cut one rank by S&P on risks to nation's bank system (23/12/2010)

>   GPBank allowed to extend operational duration (23/12/2010)

>   Foreign banks allowed to raise capital (23/12/2010)

>   Ministry hikes rates on State-subsidised loans (23/12/2010)