State Bank denies rumor of helping commercial banks

The State Bank of Vietnam (SBV) on December 15 denied a rumor of pumping VND30 trillion into commercial banks to fortify liquidity as it was applying measures to limit credit growth in order to control inflation.

On the stock market, the rumor prompted investors to increase buying. Banking shares hit the ceiling of their regulated daily trading bands with high liquidity.

Governor Nguyen Van Giau said the State Bank encouraged competition among commercial banks, adding that the banks should set interest rates in line with their capabilities.

Earlier, a rumor that SBV would tighten monetary policy, increase compulsory reserves, and issue VND1 million bank notes, caused an immediate slump on Vietnam’s stock market December 2.

Bank officials denied the rumor.

By N.Quan – Translated by Thuy Doan

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