The State Bank of Vietnam on Jan. 18 decided to reduce by up to 3 percentage points the compulsory ratios on foreign currency – the money credit institutions are required to hold in reserve.

The decision is effective from February.

Experts see the central bank’s move as a measure to provide banks more foreign currencies, particularly US dollar, to improve liquidity to support the economy.

The ratio for non-term and under 12-month deposits for state owned commercial banks (except Agribank), joint stock banks, foreign banks, joint venture banks, and branches of foreign banks has been reduced to 4 percent from 7 percent of total compulsory reserve.
The ratio for the same deposits at Agribank, central people’s credit funds and cooperative banks has been cut to 3 percent from 6 percent.

The central bank cut by 1 percentage point the ratio for deposits above 12 months for state-owned commercial banks (except Agribank), joint stock banks, foreign banks, joint venture banks, branches of foreign banks, finance companies and finance leasing companies to 2 percent, and to 1 percent for Agribank, central people credit funds and cooperative banks./.