Now there’s a refreshing approach. The Vietnamese central bank has denied a plan to bail out banks following rumours of a liquidity crisis in the sector. “The central bank is pursuing a stable monetary policy and trying to curb credit growth. No money pumping. No higher interest rates,” said governor Nguyen Van Giau. Commercial banks recently increased deposit rates in an effort to attract more capital, leading to rumours that the central bank would inject as much as 20,000bn dong ($1.05bn).
Viet Nam will help sectors in the real economy, however. The PM has announced the continuation of a 2 per cent subsidy for borrowers of medium- and long-term dong loans. The subsidy applies to both corporate and individual borrowers in the “agro-forestry, fishery, processing industries, science-technology development and purchase and trading of agro-forestry-fishery products and salt”.
Separately, a Vietnamese fund has reported a depreciation of the dong against the dollar and a reduction in the forex trading band from 5 per cent to 3 per cent. A 1 per cent base-rate hike to 8 per cent on December 1, and potential mandatory purchases of the dollar are other important changes.