Illustrated photo. Source: tuoitre.com.vn
(CPV) – On November 4th, Governor of the State Bank of Vietnam (SBV) Nguyen Van Giau issued decree No 04/CT-NHNN on the implementation of monetary, credit and banking measures to contribute to stabilizing prices and the marco-economy in the rest of 2010 and early 2011.
The decree stated by the SBV Governor requested local credit institutions to focus on 7 key measures in the near future.
Firstly, to enhance the mobilization of capital at home and abroad through solutions in line with legal regulations without any type of unsound competition to stabilize the monetary market. To maintain structure of usable capital (deposits in SBV, cash) at reasonable rate, ensuring payment capability in the rest of 2010 and early 2011.
To control the growth, scale and structure of lending to create a balance with mobilized capital. To carry out lending under legal regulations; to closely manage guarantee for domestic and foreign solvency, lending for stock and real estate business, and consumption.
Secondly, to meet the demand of borrowing capital for agricultural production, exports, business of small to medium-sized enterprises and those for supplying commodities and essential services for production and consumption in the remaining months of 2010 and the beginning of 2011.
To consider the restructure of the deadline of solvency for Central coastal provinces suffering from storms and floods, including Nghe An, Ha Tinh, Quang Binh, Khanh Hoa, Binh Thuan, Ninh Thuan, and Phu Yen.
Thirdly, to closely control mobilization and lending in foreign currency without any risk in liquidity and interest rates in foreign currency and exchange rate.
Fourth, to set mobilization and lending interest rates, buying and selling rates in foreign currency in line with legal regulations and the government’s policies.
Fifth, to provide timely information about business activities of credit institutions in line with legal regulations and SBV’s requirements.
Sixth, to timely tackle loans assisted with interest rate which were not in line with legal regulations.
Seventh, to quickly invest, upgrade technology, and improve the capability of administrating and managing business activities in line with legal regulations.
Also on November 4th, Mr. Le Duc Thuy, Chairman of the National Financial Supervisory Commission (NFSC) announced the Government had an urgent meeting to discuss the situation of the marco-economy focusing on exchange rate and interest rate and decided to conduct a solutions package to stabilize the market and the macro-economy. This is considered a necessary action as people and businesses need to be informed officially and clearly from the Government concerning about escalation of gold and USD prices over the past days.
Right after that, on November 5th, SBV issued decree No 2619/QD-NHNN on basic interest rate in Vietnam dong (VND). Accordingly, the basic interest rate has been raised from 8% to 9% per annum, dated from November 5th. With this, the basic interest rate was adjusted after standing stable at 8% per annum for the 12 consecutive months.
Together with the decision of raising the basic interest rate, on the same day, SBV also released adjustments on some other key interest rates in VND, dated from November 5th. Specifically, the recapitalization interest rate applied for credit institutions has been 9% per annum, the rediscount interest rate has been 7% per annum, the overnight lending interest rate in the inter-banking electronic payments and for loans to compensate for deficits in bank clearing has been 9% per annum.