The central bank last increased its reverse repurchase interest rate by 100 basis points to 15.00% in May this year. Vietnam reported annual inflation of 19.78% in May, up from 17.51% in April this year, according to the General Statistics Office. The Dong is currently trading around 20,550 against the US dollar.
Friday, June 3, 2011
State Bank of Vietnam Implements Series of Monetary Policy Measures
The State Bank of Vietnam implemented a series of monetary policy maneuvers to strengthen the Dong and address surging inflation. The Bank lowered the interest rate cap on US dollar deposits by individuals to 2% from 3%, and reduced the limit for institutions to 0.5% from 1%. The Bank also increased the reserve requirement ratio on US dollar deposits by 100 basis points to a range of 4% to 7%. In addition the State Bank of Vietnam ordered state-owned businesses to sell all of their foreign currency.