The compulsory reserved funds in Vietnam’s commercial banks will be likely raised to 15 per cent from current 10 per cent when the State Bank of Vietnam (SBV) is seeking measures to rein in inflation rate, said Prakriti Sofat, an economic expert of HSBS Global Research.
She forecast that Vietnam’s inflation rate may continue to increase in the second half and hit 8.5 per cent in the third quarter and 9.1 per cent in the fourth quarter this year.
With a big amount of money to be withdrawn from the economy, Vietnam’s central bank would possibly require higher compulsory reserve ratio, she said.
Nguyen Dai Lai, deputy director of the SBV’s Department of Banking Development Strategies, said that every possibility could happen as the SBV is seeking to curb the increase in consumer goods prices and inflation rate.
“The State Bank could totally hike the compulsory reserves from 10 per cent to 15 per cent to slow down CPI rate,” Lai said. “That is the way done in any country.”
Just two months ago, the central bank required all commercial banks to raise their reserve funds at the central bank to 10 per cent from 5 per cent in order to control inflation rate.
It is estimated that some VND30 trillion (US$1.875 billion) would be extracted from circulation.
The increase of compulsory reserves would help reduce credits in the economy and big sum of money in commercial banks, Prakriti Sofat said.
“It is like an interest rate hike,” said Vu Dinh Anh, an official of the Finance Science, under the Ministry of Finance. “The State will be benefited in stabilizing macro economy, but commercial banks and businesses will face disadvantages.”
Do Tat Ngoc, chairman of Agribank, said the higher compulsory reserve rate would force his bank to limit loans for other customers, meanwhile not reducing loans for farmers and small and medium enterprises.
“Businesses will find difficult in assessing to loans when we raise lending interest rates,” he said. (VnEconomy)
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