The State Bank of Vietnam - the country’s central bank - on Tuesday
injected some VND5 trillion ($240 million) into the banking system for urgent
liquidity support following the arrest of banking and football tycoon Nguyen
Duc Kien.
The State Bank of Vietnam
reassured depositors on the liquidity sufficiency of the banking system, while
actively pumping money via the open market operations (OMO) channel.
According to Reuters’ data, the
VND5 trillion OMO injections with an interest rate of 8.8 percent a year has
been the largest amount of money pumped via OMO since early February, the Lunar
New Year holiday, newswire Vneconomy reported.
It is equal to the combined
values of all the OMO transactions from June to August 20, 2012.
In July and August alone, OMO
channel saw very few successful trading sessions with the highest value
reaching some VND1.065 trillion on July 13, 2012.
But OMO channel on Tuesday
immediately witnessed active trading after news of Kien’s arrest and SBV’s
injection was released.
On the interbank market,
overnight rates were quoted at 4.5-4.7 percent a year, while those for one-week
and one-month terms were 4.8-5 percent and 6.5-7.5 percent a year respectively,
slightly higher than yesterday.
Central bank’s reassurance
SBV said on its official website
that Kien is presently not involved in the management and administration of
Asia Commercial Joint Stock Bank (ACB) where he served as vice chairman of the
board of directors and the board of founders 2-3 years ago.
Therefore, ACB depositors should
set their mind at ease, said SBV.
“However, SBV has also planned to
closely monitor changes in the monetary market for available liquidity support
when necessary to ensure stability and the safety of the system,” SBV said on
its website.
The message was reiterated by SBV
Governor Nguyen Van Binh at a meeting with the Standing Committee of the
lawmaking National Assembly which was broadcast live on Tuesday afternoon.
“I have directed municipal arms
of SBV nationwide to draw up necessary support plans to secure the liquidity of
ACB and other credit institutions in case there are mass withdrawals,” Binh
said at the meeting on bad debt situation and the national banking
restructuring progress.
A leader of the Ho Chi Minh City
branch of SBV told VnExpress that it had pumped a significant amount of money,
which is mainly to support bank liquidity.
"We are ready to offer
timely liquidity support, not only for ACB but for any other banks affected by
Kien’s arrest."
“The arrest [Monday evening] has
caused a real psychological impact on the financial market, though Kien is not
operating any banks now,” he said.
ACB ordered suspension of disbursement
Meanwhile, ACB on early Tuesday
morning asked all the branches and transaction offices to suspend the
disbursement of all loans pending notice of the executive board for fearing of
sudden liquidity stress following the arrest.
It also asked all the heads and
their deputies at those places not to leave their offices.
But by late morning, noticing the
situation did not turn negative as expected, ACB decided to approve
disbursements concerning loans of under VND2 billion. All the loans which are
worth over VND2 billion will be reported to ACB headquarters for final
approval.
TUOITRENEWS
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