Governor of the State Bank of Vietnam Nguyen Thi Hong has issued decisions on revising up several interest rates by 1 per cent, starting from September 23.

Under Decision No 1606/QD-NHNN dated September 22, the refinancing interest rate will be set at 5 per cent per year, rediscount at 3.5 per cent, and overnight inter-banking lending rate at 6 per cent.

Under another decision, the interest rate for non-term and one-month deposits in Vietnamese dong is capped at 0.5 per cent annually while that for 1-6 month deposits is 5 per cent.

Deposits of 1-6 months at people’s credit funds and micro-finance organisations will enjoy an annual interest rate of 5.5 per cent.

Close watch on FED moves

The State Bank of Vietnam (SBV) will persist in monetary policy management solutions towards macro-economic stability, but closely follow all developments to manage the situation in an appropriate manner, SBV Governor Hong said, given the Federal Reserve System (Fed)’s latest interest rate increase.

According to the governor, after the Fed hiked the interest rate on September 21, currencies in many countries have depreciated against the US dollar, such as the Euro by 1.31 per cent, British pound by 0.95 per cent, and yuan by 0.44 per cent.

Since the beginning of this year, the Japanese yen has depreciated by 25 per cent, the Euro 13.5 per cent, British pound by 20 per cent, and Thai baht 11.95 per cent, while the Vietnamese dong has depreciated only 3.8 per cent.

As of September 21, the US dollar had increased 15 per cent compared to 2021 and 19 per cent year-on-year. This is the highest increase in the past 38 years and is also the reason why other currencies have depreciated sharply against the US dollar.

In that context, the Vietnamese currency is still among the least depreciated in the world, Hong stated.

She went on to say that the biggest challenge in macroeconomic administration is to control inflation, although international organisations have assessed that this year, Viet Nam will be able to curb inflation below 4 per cent as per the target set by the National Assembly.

The central bank will continue to control the exchange rate, and intervene in the foreign currency market to limit fluctuations and ensure stability. — VNS