Central bank caps Dong interest rates at 14 percent

The State Bank of Vietnam announced September 8 that 34 out of 42 commercial banks have implemented the central bank's directive on maintaining a set interest rate on both the US$ and the VND.

Accordingly, the banks have asked their subsidiaries to strictly follow the ceiling on the interest rate at 14 percent a year on the VND and 2 percent a year on USD. They have also banned any negotiation with customers on increasing the interest rate amount.

Sai Gon Giai Phong Newspaper found out that after some commercial banks announced the ceiling interest rate at 14 percent, customers withdrew their money to deposit in other banks offering higher interest rates.

The General Director of a bank in Hanoi said on September 9 that all banks have not yet fully applied the ceiling on the interest rate. As a result, for the last two days, customers have withdrawn VND700 billion (US$33 million) from his bank to deposit elsewhere.

By Bao Minh – Translated by Hai Mien

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