Vietnam Will Not Devalue Dong, Keep Base Rate Unchanged through end-2009

The State Bank of Vietnam, the country’s central bank, said it will not depreciate the dong, keep the benchmark interest rate and compulsory reserves required among local banks unchanged through end-2009.

 

Governor Nguyen Van Giau told a conference in Ho Chi Minh City late last week that the central bank will adopt a flexible monetary policy, confirming “it will not devalue the Vietnamese dong, keep the benchmark interest rate and compulsory reserve unchanged through the end of the year.

 

Giau also required local banks to focus their lending to companies in rural Vietnam, not to raise interest rates of dong-denominated deposits above 10% per annum.

 

In the first nine months of this year, total credits for the domestic economy grew 29.3% while total deposits were up 22%, the central bank added.

 

As of Oct 22, VND412.1 trillion in government interest-support loans were phased out via local banks and financial companies. (Banking Times)