Vietnamese Central Bank Rate Cut
March 12, 2012
The State Bank of Vietnam reduced its refinancing rate by 100 basis points to 14% from 15%, which had been the level for the past five months. This was the first decrease since a 100-bp reduction in April 2009 that culminated an easing cycle from 15% prior to mid-October 2008. Today’s easing had been strongly hinted by officials and is being justified by a downtrend of inflation and lessening bank liquidity demand. Nonetheless, Vietnam has one of the highest CPI inflation rates, 16.44% in the year to February, down from 23% last August.
Vietnam’s becomes the latest of a slew of other central banks that have eased monetary policy sometime in the past eight weeks. There have been rate cuts in The Philippines, Thailand, Indonesia, Turkey, Kajakhistan, Tajikistan, Belarus, Israel, Georgia, Uganda, Gambia, Angola, Sweden, Bulgaria, Serbia, Romania, Albania, and Brazil. Reserve requirements were cut in China and India. The Federal reserve extended its forecast for retaining the present 0-25% Fed funds target to late 2014 from mid-2013, and the ECB undertook a second massive 3-year LTRO refinancing tender. Both the Bank of Japan and Bank of England expanded quantitative easing programs.
Copyright 2012, Larry Greenberg. All rights reserved. No secondary distribution without express permission.
Tags: State Bank of Vietnam
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