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Vietnam dollar shortage pushes deposit rates up   2009-09-22 - Reuters

Vietnam dollar shortage pushes deposit rates up
 
   
Vietnamese banks have increased their interest rates on dollar deposits to attract funds because of a shortage in the system, bankers said on Monday.

 

State-run BIDV, Vietcombank – the country's largest partly private lender – and several other banks raised dollar deposit rates by 0.15-0.5 percentage point, the State Bank of Vietnam said in a report.

The central bank said state-owned banks, which command the lion's share of the domestic lending market, now offered 2.0-2.5 percent on 12-month dollar deposits, up from 2 percent a week ago.

The central bank has sold part of its dollar reserves to address the shortage, said Le Duc Thuy, a former central bank governor who now heads the National Financial Supervisory Committee, which advises the government on financial and monetary policies.

In an interview published by the weekly Saigon Economic Times late last week he said the central bank had sufficient dollar reserves to intervene in the market when needed, and there was no need to adjust the exchange rate. He did not provide figures.

On Monday the central bank let the dong's mid-point fall to a nine-month low of 16,988 per dollar for interbank transactions, just above the rate of VND16,989 on Dec. 25, 2008 when it devalued the currency by 3 percent.

In the official market, the dong has fallen nearly 2 percent this year, trading at VND17,827/17,837 per dollar on Monday.

On the unofficial market, the dong rose to 18,260/18,280 per dollar on Monday from 18,310/18,340 a week ago, suggesting the dollar shortage had been partly relieved.

The Industry and Trade Ministry has forecast Vietnam's exports this year would fall 3 percent from 2008 due to the impact of the global recession on the country's main export markets in the United States, Japan and Europe.



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