HANOI, Nov 17 (Reuters) – Vietnamese banks cut their dong lending rates further on Monday after a central bank rate cut earlier this month, while the dollar/dong exchange rate stabilised, bankers said.
Vietnam’s four largest banks lowered their overnight dong loans to between 8 and 10 percent on the interbank market, against a fixing of 9.16 percent a week ago, Reuters data showed.
Vietcombank, Vietnam’s largest partly private lender, said it was cutting
the prime rate on dong loans to 13.5 percent on Monday, the lowest on the domestic market, from 15.2 percent.
Vietcombank was competing with BIDV, Vietnam’s second-largest lender, which offered 14 percent as of Monday for dong loans to businesses dealing with essential commodities such as oil products, steel, cement, fertiliser and cement.
The central bank cut its base rate to 12 percent from 13 percent on Nov. 5 — the second cut in two weeks — and lowered the compulsory reserves required
on bank deposits to support economic growth.
Vietnam should keep lowering interest rates next year and manage the exchange rate flexibly in the face of a worsening global economy, Prime Minister
Nguyen Tan Dung said last week.
The State Bank of Vietnam set the official mid-point for interbank trade at 16,490 dong per dollar on Monday, the highest since Aug. 11, after widening the trading band to 3 percent either side of the mid-point from Nov. 7, up from 2 percent.
The U.S. dollar has traded at more than 17,000 dong per dollar on the free market since the band was widened, while on the interbank market commercial
banks quoted it at near to 17,000 dong, the central bank said in its market review.
The official exchange rate of the dong as set by the central bank has fallen 2.3 percent against the dollar this year but has stabilised at just under
17,000 per dollar on the interbank market in recent sessions.
Vietnam will maintain a flexible monetary policy to support exports and follow market signals to determine foreign exchange rates, central bank governor
Nguyen Van Giau told parliament last week.
Earlier this month the National Assembly approved an export growth target
next year of 13 percent, slowing significantly from this year’s expected growth of nearly 34 percent.
(Reporting by Ho Binh Minh; Editing by Alan Raybould) Keywords: MARKETS VIETNAM/RATES (firstname.lastname@example.org; +844 3825 9623; Reuters Messaging: email@example.com)