Monetary Market Sees Continued Stability

The first month of 2007, unlike the same period last year, witnessed a stable monetary and credit market, said the State Bank of Vietnam (SBV), adding the amount of liquidable credit owned by financial institutions remains abundant despite the approaching Lunar New Year.

 

The prime interest rate for deposits in Vietnamese dong was fixed at 8.25 per cent a year in January 2007, remaining unchanged compared to the end of 2006.

 

Annual interest rates for deposits in Vietnamese dong on the inter-bank market fell by 0.17-1.23 per cent for deposits with terms of less than a month, while deposits with terms longer than a month were entitled to an increase of 0.02 per cent-0.13 per cent per year over the end of last year.

 

For this reason, the central bank announced the prime interest rate for deposits in Vietnamese dong is maintained at 8.25 per cent a year as of Feb. 1.

 

The level for deposit and lending interest rates in Vietnamese dong and US dollars offered by financial institutions is fairly stable compared to the end of 2006.

 

Following a roadmap for deregulating forex trading rules, the central bank has since December 31, 2006, expanded the fixed trading margin for US dollars by financial institutions to 0.50 per cent from 0.25 per cent as compared to the average interest rate on the inter-bank market.

 

According to SBV, the current supply of foreign currencies, both by the whole economy and the banking system, is ample thanks to increasing overseas remittances during the year-end as well as growing direct and indirect investment inflows into Vietnam. (VNA)