this comes via Currency Newshound....
VietFinanceNews.com – The State Bank of Vietnam has used around VND130 trillion to buy $6.23 billion worth of foreign currencies from banking systems for the national reserve.
The central bank has also sold some $100 million for the banking system, SBV Governor Nguyen Van Binh said at a recent meeting with the chairpersons and general directors of 14 Vietnamese commercial banks.
Vietnam’s foreign exchange reserves as of mid-March jumped 25-27 percent over the end of last year, said the central bank governor in a press conference early last month. Governor Binh then said the forex reserve surged 50 percent in 2011 over 2010.
Vietnam’s forex reserve was at $13.5 billion, equivalent to the payments for six weeks of imports following the International Monetary Fund’s norm, in the middle of last year, according to the IMF’s data.
The reserve had shrunk to about $10 billion by the end of 2010, said then Minister of Planning and Investment Vo Hong Phuc.
The SBV today held the benchmark rate at VND20,828 a dollar for the 15th week in a row, the longest streak of keeping the rate unchanged this year.
Liquidity constraints eased
The liquidity situation of banks has significantly improved over the end of 2011, said Binh at the meeting.
Interest rates on the interbank market have declined dramatically, with the overnight rate dropping to 6 percent a year.
This is the basis for the expected downward trend of interest rates in the coming months, he told Sai Gon Dau Tu Tai Chinh newspaper.
At the meeting, the central bank also required commercial banks to announce packages for the lowering of interest rates and report the situation to the Monetary Policy Department before April 12.
To facilitate lending, SBV will consider delisting some content to reduce certain restrictions for non-preferable lending, including real estate and consumer loans.
The central bank has also planned to reduce the risk ratio for property-backed and securities-backed lending from 250 percent to 150 percent and raise the loan/deposit of banks from 80 percent to 90 percent, and of financial firms from 85 percent to 100 percent.
This was one important aspect of the draft to amend and supplement some clauses of Circular No 13/2010/TT-NHNN dated back to May 20, 2010. As scheduled, the amended circular will be effective from June 1, 2012.
The Central bank will soon issue the document to expand lending activities of commercial banks and anti-unfair competition, and encourage banks to detect cases of offering depositing rates over the ceiling of 13 percent, pledging to handle those cases seriously.
The central bank will continue maintaining the interest rate cap, while considering the abolishment of the interest rate ceiling if objective conditions are met in the end of Q2 or the beginning of Q3.
It had previously planned to reduce benchmark interest rates by 1 percent every quarter, expecting rates to ease to 10 percent by year-end, according to newswire VnExpress.
SBV will lower the deposit interest rate cap by another 1 percent to 12 percent thanks to more stable macroeconomic indicators, slowing inflation, and improved bank liquidity, VnExpress quoted Do Thi Nhung, deputy head of the SBV’s Monetary Policy Department, as saying.
Vietnam’s credit growth as of March 20, 2012 was negative 2.13 percent, according to the report of Vietnam National Financial Supervisory Commission (NFSC).