State Bank of Vietnam promises to intervene to keep markets stable

The State Bank of Vietnam will ensure banks have adequate liquidity and intervene in the gold and foreign currency markets in case of volatility to stabilize them, its deputy governor, Nguyen Phuoc Thanh, has said.

The gold and foreign exchange markets have been stable, and so the central bank has not been intervening, he said at a meeting with bankers in Ho Chi Minh City May 22 to discuss the monetary market which has been affected by the East Sea spat.

The gold and foreign exchange -- mainly US dollar -- markets saw more transactions but were stable between May 15 and 20, To Duy Lam, director of the State Bank’s HCMC branch said.

Bank deposits fell in the last two weeks as people withdrew money to buy dollars and gold, bank executives said.

But banks are fully prepared for this and can ensure liquidity, they said.

Withdrawals have eased in the last two days and the situation has gradually become stable after the Government, the central bank, and banks explained the East Sea situation.

Banks want the State Bank of Vietnam to further assure the public about liquidity and draw up contingency plans to manage the situation if it worsens.

Thanh said the central bank’s HCMC branch should instruct banks to help foreign companies affected in the anti-China protests assess their damage and offer them reasonable assistance as instructed by the prime minister.

Banks should keep the credit line for these unchanged, restructure their debts, and waive or reduce interest rates so that they can resume operations, he said.

The central bank would soon provide specific guidelines for this, he added.

By Hanh Nhung – Translated by Hai Mien

Other news