SBV cuts interest rate for dollar deposits

10:34 | 29/09/2015 Economy

The maximum interest rate for American dollar deposits was reduced as of September 28, in a move to minimise the speculation in the domestic market.

SBV cuts interest rate for dollar deposits

The headquarter of State Bank of Viet Nam in Ha Noi. SBV reduces the maximum interest rate for US dollars — VNS Photo Doan Tung

Under decision 1938/QD-NHNN, issued by the State bank of Vietnam, the maximum interest rate on dollar deposits paid to organisations was cut from 0.25 per cent to zero per cent per year, while the rate for inpiduals was reduced from 0.75 per cent to 0.25 per cent per year.

The central bank said deposits made prior to the decision, which took effect on September 28, would be subject to the previous interest rate regime till the term expires. In cases where the term has expired but depositors have not received the interest, the new rate will be applied.

The SBV said the decision was aimed at preventing any hoarding of foreign currency and will contribute to effective implementation of measures on monetary policy and banking activities in the last few months of 2015.

The central bank had recently said there would be no further adjustments to the VND/USD exchange rate till the end of the year or early 2016. According to the SBV, the current rate is flexible enough to defend against negative fluctuations in the exchange rate in Viet Nam and globally. In August, it devalued the Vietnamese dong by one per cent and expanded the exchange rate trading band in commercial banks from +- one per cent to +- three per cent./.

Source: VNS