State bank widens foreign currency trade band

07/03/2008 -- 10:30 PM

Ha Noi (VNA) – The State Bank of Viet Nam (SBV) will widen the foreign currency trade band to one percent on either side of the average rate in the inter-banking market instead of the current 0.75 percent as of March 10. SBV Deputy Governor Nguyen Dong Tien said at a press briefing on controlling inflation and price hike on March 7 that the move is aimed at easing a shortage of Viet Nam dong. SBV will maintain stable primary interest rates and use monetary policy tools to stabilise savings and lending interest rates in accordance with the market’s capital demand and supply, Tien said. He affirmed that the SBV will also continue to provide capital support to commercial banks to ensure their liquidity through open-market transactions and other re-loaning instruments. The ceiling for interest rate in open-market transactions will be fixed at 9-10 percent. Also on March 7, all northern members of the Viet Nam Banking Association (VNBA) pledged to keep to a ceiling interest rate of 12 percent in line with SBV’s requirements. Regarding commercial banks’ suggestion of rescheduling time for credit note purchase, Tien affirmed that there will be no overall change for the March 17 plan but the SBV will consider delaying the purchase depending on each case.-Enditem
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