Monday, July 4, 2011

State Bank of Vietnam Reduces OMO Rate by 100bps to 14.00%

The State Bank of Vietnam reduced its open market operations (OMO) interest rate by 100 basis points to 14.00% from 15.00% previously, according to reports by Bloomberg and Reuters.  Aside from the OMO rate adjustment, the Bank held its main monetary policy rate, the Base rate, unchanged at 9.00%.  The Bank also held the Discount interest rate unchanged at 13.00%, and the Refinancing rate at 14.00%. 

Vietnam's central bank last increased the OMO, or reverse repurchase, interest rate by 100 basis points to 15.00% on the 17th of May this year.  The latest move comes after a string of aggressive monetary policy tightening measures as Vietnam deals with hyperinflation.  Vietnam reported annual inflation of 20.82% in June, up from 19.78% in May, and 17.51% in April this year, according to the General Statistics Office.  The Vietnamese Dong is currently trading around 20,600 against the US dollar (the Dong is allowed to trade within a +/- 1% band).


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