SBV’s vice Governor explains about the US dollar deposit rate cut to zero pct. p.a.

01-Oct-2015 Intellasia | Dau Tu Chung Khoan | 6:00 AM Print This Post

Regarding the decision to reduce the ceiling deposit rate in US dollars, vice Governor of the State Bank of Vietnam (SBV) Nguyen Thi Hong said that it is consistent with the operating guidelines, and contributes to improve the attractiveness of dong and curb dollarisation.

During the policy operation over the years, SBV’s Governor has always expected to enhance the position of dong and step by step curb the dollarisation following the policy of the government. For such objective, SBV has tended to gradually decrease US dollar mobilisation rates to 0.25 percent per annum applicable for organisations, and 0.75 percent per annum applicable to individual customers. This process, along with synchronous implementation of monetary tools and solutions, has brought stability to the currency and foreign exchange market in recent years.

Despite the volatility of the international market in the recent time, the domestic currency and foreign exchange markets have basically been stable, however, some organisations and individuals have hoarded foreign currencies. Therefore, SBV decided to continue lowering the deposit rates to zero percent per annum applicable to organisations and 0.25 percent per annum applicable to individuals.

According to SBV’s vice Governor Hong, the foreign currency liquidity of the banking system is currently stable. The ratio of lending to mobilisation in domestic market one is about 80 percent, while it was over 100 percent in the period of 2011-2012; and is only 60 percent if including the foreign borrowings.

Regarding the operating direction in the near future, vice Governor Hong said that SBV will continue to closely monitor the macroeconomic and monetary developments to operate synchronously the tools and solutions, in order to achieve the set objectives of the monetary policy, which are to help control inflation, stabilise the macro economy, and to support economic growth.

 


Category: Finance, Vietnam

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