Weekly information on banking activities (Feb 8 – 11, 2011)

1. Mobilizing and lending rates:

- The VND interest rates:

+ The mobilizing rates in VND changed slightly as compared to the previous week, and were commonly quoted at 13.5% - 14% p.a..

+ The lending rates for short terms were commonly 12.5% – 14.5% p.a for agricultural and rural development and exporters, 16-18% p.a for other productive and business enterprises, and 18-20% p.a for the non-productive sector.

- The USD interest rates:

+ The mobilizing rates were relatively stable. The common mobilizing rates were 0.2-0.5% p.a for demand deposits, 4.2-5.8% p.a for below 12- month deposits, and 4.5-6.0% p.a for over 12- month deposits. The highest interest rate was 6.24% p.a for 12 month term quoted by the Nam Viet Joint-Stock Commercial Bank.

+ The lending rates were commonly 6-6.6% p.a for short terms, and 7-8% p.a for medium and long terms.

The specific mobilizing and lending rates were as follows:

2. Transactions turnover :

According to the express reports of commercial banks by February 9, the total amount of transactions in the inter-bank market reached about VND 96,272 billion and USD 3,341 million, i.e. VND 16,045 billion and USD 557 million per day averagely. 

Most transactions in VND were overnight and 1 week terms that accounted for 60% of the total amount of VND transactions. Transactions in USD was mainly overnight with an amount of USD 1,439 million, accounting for 43% of the total amount of USD transactions.

3. The average inter- bank interest rates:

The interest rates by February 9 were as follows:

- For the rates in VND, the average VND interbank interest rates for below 2 week terms increased, of which the average overnight interest rate was up by 0.51 percentage point p.a to 13.23% p.a from 12.73% p.a. The average rates for other terms slightly decreased by 0.07 – 0.3 percentage points p.a. The average rates for 2 weeks and 6 months terms were unchanged.

The average rates for most terms ranged between 13% and 13.5% p.a.

- For the rates in USD, the average interest rates in USD for 2 weeks, 1 month  and 12 months terms were on a downward trend as compared to the previous week. The rates for other terms increased by 0.12 – 0.47 percentage points p.a. The average overnight rate was 0.46% p.a, up by 0.12 percentage point p.a. The average rates for other terms ranged between 0.49% - 3.77% p.a. 

There was no transactions in USD for demand loans; the amount of transactions in USD for 12 month term was small.

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

4. Exchange rate   

In order to implement Resolution No.02/NQ-CP of the Government dated September 1, 2011 on key solutions in guiding the implementation of the socio-economic development plan, on February 11, the SBV adjusted the inter-bank average exchange rate to 20,693 VND/USD from 18.932 VND/USD with the aim of reflecting more practically the market supply-demand, improving the liquidity of the market, encouraging import, contributing to restricting the trade deficit, improving international balance of payment and increasing international reserves.

Moreover, the SBV issued Decision No.230/QĐ-NHNN on February 11 on foreign currency transactions of those credit institutions with forex service license. Accordingly, the General Directors (Directors) of credit institutions with forex service license are allowed to set the buying and selling exchange rates for spot transactions between VND and foreign currencies. In regard to USD: the maximum exchange rate shall not exceed +1% of the average exchange rate of the inter-bank market of the previous business day announced by the SBV. This Decision takes effect on the date of signing and replaces Decision No.2666/QD-NHNN dated November 25, 2009 on regulations related to foreign currency transactions of credit institutions with forex service license.

Diem Hang

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