ASEAN KEY DESTINATIONS
Vietnam bank decision stabilises markets
The State Bank of Viet Nam's decision, issued late Monday, allows banks to lend 25 percent of their non-term deposits and count State Treasury and loans from other credit institutions of terms of three months or longer as part of their reserves for lending.
The decision is expected to help ease the capital crunch that banks feared due to Circular No 13's stricter capital adequacy requirements, which will take effect on Friday as previously announced.
The central bank yesterday also decided to keep the prime interest rate at 8 percent for an 11th consecutive month.
On the HCM City Stock Exchange, the VN-Index closed up 1.1 per cent to 455.13 points. Market value rose by 10 per cent over Monday's session to slightly over VND1 trillion (US$53.8 million) on a volume of almost 39 million shares.
Ha Thanh Securities Co's head of analysis and investment, Tran Van Don, said the impacts of Circular No 13 had dissipated and the market was unlikely to react dramatically.
Many investors remained watchful, Don said, noting the modest increase in trading volume and value yesterday.
He predicted that rising inflation would cause banks difficulties in lowering interest rates, putting further pressure on the markets.
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