News Room - Business/Economics

Posted on 04 Jun 2010

Vietnam seeks lower interest rates to bolster economic growth

Vietnam’s Prime Minister Nguyen Tan Dung asked the central bank to implement measures to reduce interest rates and help the country achieve economic growth of 6.5 percent this year.

 

“The State Bank of Vietnam needs to manage monetary policy flexibly, implement measures to bring down interest rates, control credit growth and keep exchange rates stable,” according to a statement filed on the government’s website late Tuesday that cited the prime minister.

 

Dung also said that ministries and local authorities should continue stabilizing the economy and help prevent inflation from accelerating to a very high level, according to the statement.

 

The Southeast Asian nation has tried to bring down borrowing costs that climbed to as high as 20 percent this year after a link was severed between the central bank’s benchmark and commercial banks’ interest rates. Deposit and lending rates are “still high,” Dung said in the statement.

 

The government in May asked the State Bank of Vietnam to lower deposit rates to 10 percent, cut borrowing rates to 12 percent and to keep the dong’s exchange rate at a “reasonable level.”

 

Vietnam’s central bank said May 31 it would leave its benchmark interest rate unchanged at 8 percent in June, keeping the measure at the same level held since early December. Inflation slowed for a second month in May as food supplies cooled prices, government data show. Consumer prices climbed 9.05 percent from a year earlier, after rising 9.23 percent in April.