The State Bank of Viet Nam (SBV) has adjusted the dong-dollar reference rate for the first time since December last year to 21,036 from 20,828, according to a statement on the central bank’s website.
The 1 per cent adjustment, effective today, is aimed at improving the balance of payments and increasing foreign exchange reserves amid efforts by the government to boost exports and spur the economy.
The central bank also cut the dong deposit rate cap to 7 per cent from 7.5 per cent and dollar deposits for individuals to 1.25 per cent from 2 per cent.
Short-term lending rates for prioritised sectors including agriculture, exports, support industries, hi-tech businesses and small and medium enterprises (SMEs) will be cut from 10 to 9 per cent.
The adjustment was “to more accurately reflect the supply and demand of foreign currency in the market” and to “create stability” for the foreign-exchange market, the SBV said.
The bank said it would use all necessary measures to ensure the stability of the exchange rate.
Credit for the five months through May 31 rose 2.98 per cent, compared with a 0.56 per cent increase in the same period a year earlier, according to the central bank.
The business-climate index also climbed in the second quarter from the first, according to the European Chamber of Commerce in Viet Nam.
The SBV has cut rates eight times since 2012, with the refinancing rate coming down to 7 per cent from a high of 15 per cent in the first quarter of last year.
Inflation has come down from almost 23 per cent in August 2011 to 6.5 per cent, allowing the embattled economy a chance to hit the 5.3 per cent growth estimated by the International Monetary Fund (IMF) this year. â€” VNS