Vietnam will not lower the requirement on compulsory reserves banks must keep against their deposits, the central bank’s governor said on Thursday, even though inflation is expected to ease in coming months.
“I can assure you that the reserve requirement will not be changed,” State Bank of Vietnam Governor Nguyen Van Giau told reporters.
The central bank will ensure its monetary management measures will stay in line with government policy aimed at bringing Vietnam’s double-digit inflation down to single digits by the end of next year, Giau said.
He said the central bank was seeking government guidance and would issue the base rate for September later on Thursday or on Friday at the latest. The rate has been kept unchanged at 14% since June 11, and banks can lend at up to 21% per year.
Giau declined to say if there were any changes in the base rate for September.
Banks have been keeping aside 11% of their dong and dollar deposits of up to 12 months since February 1, up from 10% previously while the reserves for deposits longer than 12 months have been raised to 5% from 4%.
On Wednesday, Vietnam cut the retail price on petrol by 5.6%, the impact of which would be reflected in Vietnam’s consumer price index next month.
Prior to the price cut, experts from the government’s domestic market regulatory group had forecast the monthly inflation in September would be 1-1.2%, against a monthly rise of 1.56% in August.