|
Monthly information on banking activities (July, 2011)
I- The State Bank of Vietnam activities:
In response to the Resolution of the Government and direction of the Prime Minister at the Government’s regular meetings in June and July, 2011, the State Bank of Vietnam (SBV) continued to pursue a tight and prudent monetary policy, contributing to containing inflation, stabilizing macro economy and ensuring social protection. In particular:
1. To guide SBV entibies to continue proactively, flexibly and effectively conducting monetary policy instruments in order to reduce inflation pressure and interest rates in line with the practical condition, and ensure the liquidity of the banking sector. Accordingly, SBV reduced open market operations (OMO) 7-day interest rate to 14% p.a from 15% p.a from July 4, 2011 and the number of OMO transactions to 1 session from 2 sessions per day from July 12, 2011; and continued refinancintg for agriculture and rural development.
2. Thanks to favorable movements in the foreign exchange market, SBV bought more foreign currencies to increase the amount of international reserves, and flexibly managed monetary policy instruments to recover the VND amount spent to buy foreign currencies.
3. To instruct credit institutions to continue implementing the tasks and measures set out in Resolution No.11/NQ-CP of the Government and Directive No.01/CT-NHNN of the SBV with the focus on (i) always keeping the credit growth rate of each comercial bank of less than 20% in 2011, gradually cutting down the pace and proportion of loans for the non-productive sector to 22% of the total loan outstanding by June 30, 2011 and 16% by December 31, 2011, strictly controlling the credit quality, and reviewing loans for clients; (ii) reassessing risks, and gradually reducing the operational scale in the secondary market to a reasonable level in line with the size of credit institutions in the primary market and their risk management capacity; and (iii) strictly complying with the regulations on the mobilizing interest rate caps in VND and USD and the termination of gold mobilizing and lending.
4. To continue strictly monitoring loans for the non-productive sector of those credit institutions which still maintained the loan proportion of over 22% for the non-productive sector by June 30, 2011.
II. Credit and monetary performance
1. Interest rates:
As compared to end June, the VND mobilizing interest rates declined by 0.5 -0.8 percentage point p.a., the VND lending interest rates slightly declined by 0.1-0.3 percentage point p.a for the production and business sector, and increased by 0.5 percentage point p.a for the non-productive sector; and the mobilizing and lending rates in foreign currencies were relatively stable.
The average VND lending rate was 18.64% p.a (The rates for rural and agricultural production, and exporters were 16-21% p.a; the rates for other production and business sectors were 18-22% p.a; and the rates for the non-productive sector were 20-25% p.a). The average USD mobilizing rate was 1.96% p.a, and the average USD lending rate was 6.1% p.a.
The lending rates in the inter -bank market were stable in comparison with end June, the overnight lending rate ranged between 12-13% p.a, and the lending rates for 1 week and over 2 weeks terms were 14-15% p.a and 15.5-16.5% p.a respectively.
2. Exchange rate:
The foreign exchange market continued to be improved. Commercial banks continued buying more and more foreign currencies from entities and individuals. The buying and selling exchange rates at commercial banks were below the fixed ceiling rate. The average inter-bank VND / USD exchange rate on July 26 was 20,608 while commercial banks quoted their exchange rates at 20,560-20,610 VND/USD.
3. Fund mobilization
The total deposit outstanding with credit institutions by July 20 was estimated to decline by 0.25% as compared to the previous month, of which the deposits in VND were up by 0.51% and foreign currencies down by 3.29%. The total deposit outstanding was up by 3.96% against end 2010.
4. Credit to the economy
Credit to the economy by July 20 was estimated to decline by 0.19% as compared to the previous month, of which credit amount in VND was down by 0.88% and foreign currencies up by 1.96%. Credit to the economy was estimated to be up by 7.57% in comparison with end 2010.
5. Total liquidity
The total liquidity by July 20 was estimated to increase by 0.39% as compared to the previous month, and by 3.57% against end 2010, of which the cash in circulation was up by 4.55% in comparison with the previous month and up by 1.25% p.a against end 2010
|
