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Vietnamese banks safe from global financial crisis

In Uncategorized on September 30, 2008 at 6:59 pm

Hanoi (VNA) – Vietnamese banks will not be affected by the financial crisis currently engulfing the US , the Governor of the State Bank of Vietnam (SBV) Nguyen Van Giau said on September 30.

The governor told a press briefing held by the Government Office that the SBV has closely monitored the operations of commercial banks and will continue to intervene in the foreign exchange market to ensure liquidity for the banking system as well as the national economy.

Vietnamese banks, including foreign, joint venture, commercial state-owned and commercial joint stock banks, have moved to actively avoid the crisis, Giau further said.

According to Giau, a redundancy of liquidity has been recently observed at Vietnamese banks, reaching 40 trillion VND on the day and ranging between 30-35 trillion VND on previous days.

Inter-bank interest rates were reduced to 12 percent per annum for one-or two-week loans as a result of high liquidity.

The State Bank Governor said that Vietnam ’s foreign currency reserves have increased by 1.6 billion USD since early 2007 and are increasing further. The reserves are stored in safe banks in foreign countries. To date, 82 percent of Vietnamese’s foreign currency reserves were sent to central banks in the US , the UK , France and Germany and the remaining 18 percent have been deposited in foreign commercial banks of high credit ratings at 3A and 2A.

The Governor stressed that Vietnam does not have a relationship with the investment banks and groups that have collapsed in the US .

The US financial crisis has not affected the Vietnamese banking system at this point in time, he noted.

According to the Governor, in the remaining months of this year, the world and Vietnamese economies will undergo complex developments.

Implementing the instructions of the Party Central Committee’s Political Bureau and the Prime Minister, the State Bank of Vietnam will continue with the strict but flexible monetary policy, while strictly monitoring developments of the world financial and monetary markets as well as the operations of commercial banks in order to make the correct management decisions.

The State Bank will ensure the payment capacity of the banking system and the economy, increase inspections, prevent and deal firmly with violations of regulations on currency and banking activities, and strengthen the current system of credit organisations.-

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