ID :
11897
Tue, 07/08/2008 - 15:44
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http://m.oananews.org//node/11897
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State Bank says successful in easing monetary fears
Hanoi, Jul 8 (VNA) - Interest rates and foreign currency exchange rate concerns in the market have been eased thanks to a series of measures taken by the State Bank of Vietnam to stabilise the country's monetary market,.
According to statistics released by the State Bank of Vietnam (SBV),interest rates for deposits in VND issued by State-owned commercial banks last week hovered around 17-18 percent per year, and those issued by joint stock commercial banks stayed at 18-18.5 percent per year.
The rates offered by commercial banks in the first week of the month are more realistic than those offered at the end of June.
The interest rate for VND loans with less-than-one-week periods on the inter-bank market last week also decreased. The overnight interest rate is now at 17.43 percent per year and the rate for one week loans is at 19.85 percent per year.
The State bank also said that performance in the foreign exchange market was increasingly better matched actual supply and demand in the market after the SBV decision to double the daily trading band for USD/VND exchange rate to +/-2 percent against the inter-bank rate. The State Bank Governor's regulations to correct foreign currency trading activities have taken effect.
On July 2, the VND/USD exchange rate among commercial banks varied from 16,840 to 16,848 VND, 1.35 percent higher than that offered before the decision was made. The exchange rate on the free market the same day was between 17,400 and 17,550 VND, a decrease of 2.25 percent.
The SBV affirmed that the public would be timely informed of the bank's measures to manage the country's banking system, especially information related to interest rates, exchange rates and foreign currency management.
However, measures to curb inflation now still definitely have side-effects in the middle term which explains the economy's shortage of capital due to tightened monetary policies. In the future, many enterprises will face financial difficulties and will have to narrow production scales.
Another middle-term difficulty is that the world's economy is in free-fall.
Crude oil prices continue to increase, breaking record after record, which will create even heavier inflation pressure than in the first six months of the year. Exports will struggle to rise as expected and the stock market will probably not prosper.
The Government's cutting in public investment and State-owned enterprises' delaying of projects, though hailed as good and drastic solutions, will lead to difficulties in employment in local and foreign-invested enterprises.
According to statistics released by the State Bank of Vietnam (SBV),interest rates for deposits in VND issued by State-owned commercial banks last week hovered around 17-18 percent per year, and those issued by joint stock commercial banks stayed at 18-18.5 percent per year.
The rates offered by commercial banks in the first week of the month are more realistic than those offered at the end of June.
The interest rate for VND loans with less-than-one-week periods on the inter-bank market last week also decreased. The overnight interest rate is now at 17.43 percent per year and the rate for one week loans is at 19.85 percent per year.
The State bank also said that performance in the foreign exchange market was increasingly better matched actual supply and demand in the market after the SBV decision to double the daily trading band for USD/VND exchange rate to +/-2 percent against the inter-bank rate. The State Bank Governor's regulations to correct foreign currency trading activities have taken effect.
On July 2, the VND/USD exchange rate among commercial banks varied from 16,840 to 16,848 VND, 1.35 percent higher than that offered before the decision was made. The exchange rate on the free market the same day was between 17,400 and 17,550 VND, a decrease of 2.25 percent.
The SBV affirmed that the public would be timely informed of the bank's measures to manage the country's banking system, especially information related to interest rates, exchange rates and foreign currency management.
However, measures to curb inflation now still definitely have side-effects in the middle term which explains the economy's shortage of capital due to tightened monetary policies. In the future, many enterprises will face financial difficulties and will have to narrow production scales.
Another middle-term difficulty is that the world's economy is in free-fall.
Crude oil prices continue to increase, breaking record after record, which will create even heavier inflation pressure than in the first six months of the year. Exports will struggle to rise as expected and the stock market will probably not prosper.
The Government's cutting in public investment and State-owned enterprises' delaying of projects, though hailed as good and drastic solutions, will lead to difficulties in employment in local and foreign-invested enterprises.
