VietNamNet
Bridge – Contrary to all predictions,
the move by the State Bank of Vietnam to slash the deposit interest rate
further--to 9 percent per annum from June 11 has been a good move in the
current circumstances.
The
State Bank of Vietnam has once again eased the ceiling deposit interest rate
from 11 percent to 9 percent, after it repeatedly slashed the interest rate
just within a short time.
Vietnam’s
GDP grew by four percent only in the first quarter of the year, the lowest rate
since 2009. The inflation rate in May was 8.34 percent, the 2-year lowest rate.
International
experts have shared the same viewpoint that the State Bank has every reason to
slash the interest rate once more, since Vietnam has witnessed positive signs
in the macro economy recently.
Just a
couple of weeks ago, international analysts showed their concern about the too
sharp and too rapid interest rate reductions in Vietnam, saying that this may
make the high inflation return. However, experts now believe that no need to
worry about the sharp interest rate reductions, because both the inflation and
growth have been slowing down.
After
announcing the ceiling deposit interest rate reduction to 9 percent on June 7,
Governor of the State Bank Nguyen Van Binh announced the one percent reduction
in other key interest rates. The refinancing interest rate, for example, has
been eased to 11 percent per annum, re-discount rate to 9 percent, while the
overnight interest rate for interbank online payment has been slashed to 12
percent per annum.
The
Financial Times wrote that the move of the State Bank of Vietnam was made after
the macroeconomic statistics show improvements. Standard & Poor’s on
Wednesday upgraded Vietnam’s credit rating from “negative” to “stable” after
Vietnam has successfully controlled the inflation.
The
newspaper has commented that the upgrading in credit rating is really a reward
for Vietnam’s fight against the escalating inflation.
The
move of slashing interest rates is believed to be a common tendency in Asian
countries which are striving to stop the decrease in economic growth. The
Chinese central bank on June 7 also unexpectedly reduced the prime interest
rate of Chinese yuan after three years.
The
State Bank of Vietnam is making every effort to reduce the capital mobilization
cost in an effort to help commercial banks slash the lending interest rates. As
such, the main beneficiaries of the interest rate reductions would be
businesses, who have been thirsty for capital due to the tightened monetary
policies aiming to curb inflation.
The
move is believed to encourage the merger of banks, which comes in line with the
State Bank’s strategy on restructuring the banking system. Once the interest
rates reduce, small banks would find it difficult to mobilize capital, because
depositors would deposit their money at big banks, according to Prakriti Sofat,
an economist of Barclays Plc in Singapore.
The
International Monetary Fund IMF has advised Vietnam to pay more attention to
stabilize the prices instead of slashing interest rates, even though this would
lead to lower growth rate.
However,
a report released by JP Morgan Chase said no need to worry about the interest
rate reductions in Vietnam. In the context of rapid inflation decrease and low
credit growth rate, no need to worry about the influences of the interest rate
adjustment to the economic stability at this moment.
JP
Morgan Chase has predicted that the inflation rate in Vietnam would be 6.8
percent in June and drop to 5 percent by the third quarter of the year.
Source:
TBKTVN
Business & Investment Opportunities
YourVietnamExpert is a division of Saigon Business Corporation Pte Ltd, Incorporated in Singapore since 1994. As Your Business Companion, we propose a range of services in Strategy, Investment and Management, focusing Healthcare and Life Science with expertise in ASEAN. We also propose Higher Education, as a bridge between educational structures and industries, by supporting international programmes. Many thanks for visiting www.yourvietnamexpert.com and/or contacting us at contact@yourvietnamexpert.com
No comments:
Post a Comment