Six
Vietnamese commercial banks, including the country’s two biggest listed
lenders, cut borrowing costs for businesses as the government strives to make
credit cheaper to protect economic growth.
VietinBank, or Vietnam Joint Stock Commercial
Bank for Industry & Trade, Joint-Stock Commercial Bank for Foreign Trade of
Vietnam, also known as Vietcombank, and others lowered dong lending rates for
loans to businesses and manufacturers to a range of 17 percent to 19 percent,
according to a statement on the State Bank of Vietnam’s website today.
Asian nations from Vietnam to India face a
growth slowdown as the global recovery falters, adding pressure to prop up
expansion even as inflation remains elevated. Vietnam’s government, which faces
a 23 percent inflation rate, said last month the central bank will keep policy
interest rates unchanged for now and consider cutting them if price gains slow.
“We do see a lot of other Asian central banks
stopping in their tracks, more or less putting the tightening cycle on the
backburner right now,” said Vishnu Varathan, an economist at Capital Economics
(Asia) Pte in Singapore. “A similar concern could be ripping through the policy
circles in Vietnam. While they do remain cognizant it’s still too premature to
reverse out the cycle, they’re afraid of stifling the productive sector.”
Growth challenges
Some Vietnamese firms have faced growth
challenges as the cost of capital has risen as high as 30 percent, Le Xuan
Nghia, an adviser to the premier, wrote last month in a statement released at a
conference in Hanoi. State Bank of Vietnam Governor Nguyen Van Binh said in
August the monetary authority aimed to lower dong lending rates through to the
end of 2011.
Vietnam Bank for Agriculture and Rural
Development, or Agribank, the country’s largest bank by assets, is expected to
also lower rates to 17 percent to 19 percent soon, the central bank said in
Friday’s statement.
Thirty-four of Vietnam’s 42 commercial banks
implemented a request to comply with the caps on interest rates payable for
dong and dollar deposits, it said. Banks are expected to report violations of
the rate cap at other lenders to the monetary authority, according to the
statement.
Vietnam’s consumer prices increased 23.02
percent in August from a year earlier, the fastest pace among 17 Asian
economies tracked by Bloomberg.
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