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Vietnam hikes reverse repo rate to 14 pct from 13 pct
Vietnam's central bank raised the rate it offers for loans via open market operations by 100 basis points to 14 percent on Wednesday, according to an announcement seen by Reuters.
The hike in the reverse repurchase rate followed increases in two other policy rates, the refinance rate and the discount rate, announced on Friday after annual inflation in April reached a 28-month high of 17.51 percent.
The central bank's last increase in the reverse repo rate, a 100 basis point move on April 1, accompanied an increase of the same magnitude in the refinance rate.
Friday's rate hikes were announced after the two open market operations sessions and markets and government offices were closed from Saturday through Tuesday for a national holiday.
The Vietnamese authorities have tightened several rates multiple times since they started tightening monetary policy in mid-February. The government has also vowed to rein in spending to tame the highest inflation among major Asian economies.
On Tuesday Minister of Planning and Investment Vo Hong Phuc said stamping out inflation took precedence now over growth, and he announced a revised, lower gross domestic product growth and a higher inflation target.
Rising inflation is a worry across the region where pressures have built as Asia led the global recovery.
Vu Van Ninh, Vietnam's finance minister, said on Wednesday the country had a different situation with regard to inflation than many other Asian economies because the government still had the ability to control prices of some goods.
Economists say government-mandated increases this year in the prices of electricity and fuel have exacerbated Vietnam's inflation problem.
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