Soft loan repayment to boost dong liquidity (14/10)
06/08/2010 - 20 Lượt xem
They expected about half of the loans, valued at VND409 trillion (US$22.9 billion), under the government's interest subsidy scheme for short- and medium-term debt would be repaid by end-December. The rest would be due by the end of 2011.
In the face of the economic slowdown, Hanoi rushed out a series of stimulus measures earlier this year, including a $1 billion fund to pay for 4 percentage points of interest on loans to businesses to spur growth.
“Robust dong loan growth so far this year has outpaced deposit growth, leading to a temporary dong fund shortage, but the repayment of part of the subsidized loans would solve the short-term fund shortage,” a banker in Ho Chi Minh City said.
On the interbank market, fixings of interest rates on overnight dong loans eased to about 6.23 percent from 6.49 percent a week ago and around 7 percent last month, indicating improved short-term dong funds at banks, bankers said.
They also said the central bank had been injecting around VND7 trillion per day so far this month to banks via open market operations with a tenor of seven days at 7 percent, helping short-term dong liquidity.
“The average dong interest rates in the interbank market for all terms were on a downward trend compared with the previous week,” the central bank said in its weekly monetary market review.
Since about August the State Bank of Vietnam has been pumping short term money into the system on an almost daily basis via reverse repos to help ease the dong shortage.
On the dollar front, the central bank said more exporters sold their foreign exchange earnings to banks in the past week, helping boost dollar funds.
Bankers said exporters had been selling their greenback holdings to move to higher yielding dong deposits which pay around 8-9 percent per year. Dollar deposit interest rates are just under 1 percent per year.
Source: Reuters, Thanhnien
