Vietnam SBV Takes Bold Measures to Stabilize Monetary Market
The State Bank of Vietnam, the country’s central bank, has decided to take a number of bold measures to stabilize the monetary market which has been doomed by gold and forex speculations and rising credit growth.
The central bank decided to raise benchmark interest rate by one percentage point to 8% effectively from December 1, 2009 as well as the refinancing and rediscount rates after 10 months of loose monetary policy in a move to help local banks to improve liquidity.
The SBV also decided to narrow trading band of the Vietnamese dong against the U.S. dollar to plus and minus 3%, down from the current 5%, and raise the forex rate on the official market by 5.44% to VND17,961 effective Nov 26.
The stabilize the forex market, the central bank also requested major state-owned companies to sell out US$5 billion to US$6 billion of their dollar deposits estimated at US$10.3 billion to commercial banks, the VTV said.
The government will exit the first stimulus package, under which VND414.46 trillion (US$23.19 billion) was phased out as of Nov. 12, by the end of 2009 instead of by the end of the first quarter of 2010, it added.
The credit growth was up 34.5% so far this year, surpassing 4.5% of the year’s limit, it elaborated. (VTV)
Vietnamese
