Central bank cuts foreign-currency reserve ratio for banks

The State Bank of Vietnam announced January 18 a reduction in banks’ foreign-currency reserve ratio with effect from February.

The reserve rate for sight deposits and those below 12 months will be reduced to 4 percent from 7 percent for all State-owned banks except the Bank for Agriculture and Rural Development (Agribank), joint-stock banks, and foreign banks.

For Agribank, central people’s credit funds, and cooperative banks, it will be halved to 3 percent.

For deposits of above 12 months, it will be 2 percent and 1 percent for the two categories of lenders.

The cut in the reserve ratio is expected to help the banks meet the market demand for foreign exchange.

By H.Yen – Translated by Thuy Doan

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