State Bank holds line on prime rate
The prime rate is to remain at 8 percent for at least next month with the aim of defusing the growing threat of inflation.
The refinance and discount rates were also kept at 8 percent and 6 percent, respectively, while the overnight interbank rate for electronic payments was reduced to 8 percent.
The refinance and discount rates were also kept at 8 percent and 6 percent, respectively, while the overnight interbank rate for electronic payments was reduced to 8 percent.
The prime rate is to remain at 8 percent for at least next month with the aim of defusing the growing threat of inflation.
The refinance and discount rates were also kept at 8 percent and 6 percent, respectively, while the overnight interbank rate for electronic payments was reduced to 8 percent.
The benchmark prime rate was last raised by one percentage point in late November, only the second adjustment in 2009. Back in January last year, the prime rate was lowered from 8 percent to 7 percent to spur lending and stimulate the economy during the global recession.
In the latest report by the central bank, investment rates for deposits in Vietnamese dong remained stable at 10-10.49 percent at private bank and 8-9 percent at State-owned banks. Most private banks were offering promotion interest rates and gifts to absorb available capital.
Dong loans were charged at 12 percent for both short and long terms.
Interest rates for US dollar deposits increased by 0.1-0.3 percent against the previous week at private banks, ranging from 3.3-4.5 percent. Lending rates for dollar loans were about 6.5-8 percent.
After the capital sterilisation of the central bank, interbank rates were cooled by 1-1.42 percent to about 10.52 percent from a rumoured rate of 16-18 percent in previous weeks. The central bank aimed to bring the interbank rate down to about 9 percent.
Total transaction values on interbank rates last week were 78.69 trillion VND (4.25 billion USD) and 1.51 billion USD, up 16.31 percent and 6.1 percent against the previous week.
Jan.26 ’s decision by the central bank to hold the prime rate confirmed that commercial banks would not be able to raise interest rates before the biggest festival of Lunar New Year.
Some market watchers predicted that banks might get into trouble through a lack of liquidity because they could not raise interest to attract depositors.
“The central bank is aware of the market trend and we are actively preparing measures to ensure systematic liquidity and reasonable credit growth,” said State Bank deputy governor Nguyen Dong Tien.
Tien also confirmed that the capital injection through open market operation, refinancing and overnight lending would not put much pressure on inflation./.
The refinance and discount rates were also kept at 8 percent and 6 percent, respectively, while the overnight interbank rate for electronic payments was reduced to 8 percent.
The benchmark prime rate was last raised by one percentage point in late November, only the second adjustment in 2009. Back in January last year, the prime rate was lowered from 8 percent to 7 percent to spur lending and stimulate the economy during the global recession.
In the latest report by the central bank, investment rates for deposits in Vietnamese dong remained stable at 10-10.49 percent at private bank and 8-9 percent at State-owned banks. Most private banks were offering promotion interest rates and gifts to absorb available capital.
Dong loans were charged at 12 percent for both short and long terms.
Interest rates for US dollar deposits increased by 0.1-0.3 percent against the previous week at private banks, ranging from 3.3-4.5 percent. Lending rates for dollar loans were about 6.5-8 percent.
After the capital sterilisation of the central bank, interbank rates were cooled by 1-1.42 percent to about 10.52 percent from a rumoured rate of 16-18 percent in previous weeks. The central bank aimed to bring the interbank rate down to about 9 percent.
Total transaction values on interbank rates last week were 78.69 trillion VND (4.25 billion USD) and 1.51 billion USD, up 16.31 percent and 6.1 percent against the previous week.
Jan.26 ’s decision by the central bank to hold the prime rate confirmed that commercial banks would not be able to raise interest rates before the biggest festival of Lunar New Year.
Some market watchers predicted that banks might get into trouble through a lack of liquidity because they could not raise interest to attract depositors.
“The central bank is aware of the market trend and we are actively preparing measures to ensure systematic liquidity and reasonable credit growth,” said State Bank deputy governor Nguyen Dong Tien.
Tien also confirmed that the capital injection through open market operation, refinancing and overnight lending would not put much pressure on inflation./.
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