SBV says to ensure local currency liquidity for all banks

The central bank has affirmed that it will ensure dong liquidity of the banking system, especially when numerous commercial banks have cut lending rates for manufacturing industries to 17 percent-19 percent from 18 percent-22 percent.
In a meeting with 12 large commercial banks held on Tuesday in Hanoi, the State Bank of Vietnam (SBV) said local lenders had performed well in controlling the lending balance for non-productive industries.

It also revealed that it was urgently working with related agencies to remove some social security objectives out of the list of non-productive industries enjoying preferential interest rates.

According to SBV, the amount of mobilisation and loans in the first 20 days of last month decreased but has improved since September 23, showing a real sound development of credit institutions.

There is a high possibility that the demand for dong borrowing will keep rising this month when the recapitalisations come to maturity, which might lead to an upsurge in lending interest rates.

Therefore, the central bank is set to secure liquidity of the banking system, especially small banks, by continuing to pump money into the open market.

SBV said in a statement on Wednesday that it would harshly supervise liquidity in the market, and be proactive to detect credit institutions facing liquidity risks to carry out appropriate timely solutions.

As for the US dollar, SBV also hinted at strictly controlling loans in tune with mobilisation performance in local and international markets.

On gold, SBV pledged to deploy effective measures to narrow the differential between local and world prices as much as possible, to prevent gold speculation and negative impacts on the foreign exchange rate.
Saigon Times Daily

Tags: Vietnam banking industry, Vietnam finance, Vietnam financial