State Bank of Vietnam to lower interest rates if CPI up 1.4 per cent

January 27, 2011 | 23:39

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State Bank of Vietnam (SBV) will lower the interest rate immediately if the consumer price index (CPI) increases at around 1.4 per cent in February, said Governor Nguyen Van Giau on January 25.

The current high lending and mobilizing rates are attributed to a number of reasons, including businesses’ high stockpile and bonuses for the Lunar New Year occasion, he said.

January’s CPI rose by 1.74 per cent and 12.17 per cent against the last December and the same period last year respectively.

To stabilize the domestic market, SBV has just put forward a more active and flexible mechanism of interest rate management to the Government for approval.

The proposed mechanism extends the Governor’s competence, Mr. Giau said.

The foreign currency market has changed positively since the beginning of this year, said the SBV Governor, adding that Commercial banks were able to purchase more foreign currency for sale.

Besides, the increased inflows of overseas remittance, export turnover, and foreign capital during the last quarter of 2010 have considerably contributed to stabilizing the foreign currency market.

VPG

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