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Posts Tagged ‘rates’

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Interest rates expected to drop in 2011

In Uncategorized on January 12, 2011 at 7:14 am

Interest rates are expected to go down this year because they are presently too high and cannot rise any higher, an economist has said.

Transactions conducted at a Southern Bank branch in Ho Chi Minh City (Photo: SGGP)

This year has seen skyrocketing interest rates due to the soaring inflation in 2010, with savings interest rates and lending interest rates being 14 percent per year and 17-18 percent per year respectively.
 
According to economists, the rates are already too high for enterprises; therefore, it is unlikely that interest rates will go any higher.
 
Enterprises and commercial banks have hoped that the State Bank of Vietnam will regulate interest rates in compliance with the Law on Credit Institutions, which took effect early this year.
 
Banks said that this will give them the flexibility in adjusting interest rates in accordance with foreign exchange rates and inflation.
 
Economists said the interest rates will drop by the end of the first quarter of 2011, because demand for production and business funds from various enterprises will decrease after the Tet holiday.
 
In addition, banks will be able to mobilize funds from residents more easily. This is because the inbound remittance will increase, and people will have more money in cash.
 
Therefore, banks might reduce their lending interest rates to 15-16 percent by the second quarter of 2011.
 
Some commercial banks said they cannot lower the interest rates yet, because the expenses for mobilizing funds are still very high.
 
However, they said they can offer lower rates to their regular client base.
 
The central bank said early this year that it will use the prime interest rate to curb high interest rates, but not as a monetary policy management tool.  
 
The bank will focus its management on refinance, open market operations (OMO) and rediscount rates.
 
The central bank said OMO rates will be flexible and be adjusted to market rates.
 
Deputy general director of a joint stock bank said that to lower interest rates and stabilize the monetary market in 2011, drastic solutions will have to be taken to contain inflation.
 
Economists said there should be a special mechanism concerning small commercial banks.
 
They said for the long run, interest rates for the dong should be floated in the government’s direction. However, in abnormal market conditions, the central bank must regulate market interest rates.
 
The central bank also said that it has targeted credit growth at 23 percent for 2011, two percent lower than last year, and loans will be prioritized for the production sector.

Source: SGGP

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Coal prices, electric rates to stay stable, vows ministry

In Uncategorized on December 21, 2010 at 9:30 am




Coal prices, electric rates to stay stable, vows ministry


QĐND – Monday, December 20, 2010, 21:26 (GMT+7)

Coal and power prices would not go up in the first quarter of 2011, said the head of the Ministry of Finance (MoF) Price Management Department, Nguyen Tien Thoa.


The ministry had taken the decision because prices of these two utilities often had a knock-on effect on other goods and services, which could lead to an unwanted general price rise, said Thoa at a press conference on Friday.


“Price fluctuations often occur at the end of the year owing to increased demand. Therefore, from now until early next year, MoF will focus on resolving difficulties in production. We want to balance supply and demand and to avoid any shortages, essentially in underprivileged areas.”


According to the General Statistics Office, the Consumer Price Index (CPI) is likely to hit 11 percent this year. Thoa said weaknesses of the economy had played a part in the increase.


”Growth depends mainly on increased investment but investment remains inefficient and competitiveness is low,” said Thoa at the press conference.


He added that the Ministry of Finance (MoF) had taken numerous steps to help stabilise prices.


“For example, MoF has instructed localities to use local standby budgets to provide non-interest capital for enterprises that trade reserved commodities; this will allow them to sell items at prices 5-10 percent lower than the usual market price,” Thoa said.


Thoa added that MoF had informed localities to delay the purchase of non-essential items to minimise demand-pull inflation.


“These classic solutions are significant if we want price stabilisation.”


MoF’s recent inspections in HCM City and several other southern provinces revealed that these localities had already stockpiled enough essential goods to meet local needs. Localities had also set up sales and distribution networks to better service underprivileged areas.


Thoa added the MoF had provided financial support to help regions facing severe weather to recover short-term vegetable crops and had urged local farmers not to export pigs, which were essential for the New Year holiday.


Forecasts predicted further economic recovery next year, which would lead to the increased demand for production inputs, and have an impact on prices.


“To that end, MoF will continue reforming the market-oriented pricing management mechanism, and respect enterprise and trader’s rights to set their own prices and forms of competition by replacing Pricing Ordinance by Pricing Law,” said Thoa.


“Next year, implementation of the market price scheme should be incorporated into the completion of the goods and service logistics system. We should also strive to reduce production costs and implement policies which ensure underprivileged households have access to basic social services including education, healthcare, and housing.”


Ensuring supplies


Deputy Minister of Industry and Trade Ho Thi Kim Thoa discussed measures aimed at market stability and ensuring adequate supplies of essential goods during Tet in meeting with officials from the HCM City Department of Industry and Trade last Thursday.


Department deputy director, Le Anh Dao, said firms had stockpiled 15,800 tonnes of rice and sticky rice, almost twice the quantity originally planned for. They had also put aside 9,800 tonnes of sugar (233 percent of the plan), 14,500 tonnes of meat, 5,200 tonnes of fruits and vegetables; and 55 million eggs.


At present, the Co.op Mart supermarket chain has stocks valued at 30 percent more than their planned value.


And it isn’t just firms that have signed up for a city price stabilisation programme that are stocking up; other companies are preparing for the year’s biggest festival which falls in early February this time.


German supermarket chain Metro has food stocks worth 1.1 trillion VND (56.4 million USD).


French supermarket Big C also has large stocks and has promised to keep prices and supply relatively stable for the next two months.


The MoIT has instructed the Department to continue working closely with firms to keep prices of goods like petrol, cement, and food stable during Tet.


Besides the eight essential goods targeted under the programme, authorities should also ensure adequate supply of cakes, candies, and jams for the Lunar New Year, Thoa said.


He said cities needed to ensure that all markets sell goods covered by the price stabilisation programme.


The Department of Transport should also give rush hour priority to vehicles delivering to supermarkets and shopping malls.


Source: VNA


Source: QDND

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State Bank tries to prevent banks from increasing their interest rates

In Uncategorized on December 16, 2010 at 10:04 am

The State Bank of Vietnam has ordered its branches to monitor all other banks that have an interest rate higher than 14 percent a year.

The State Bank is trying to prevent banks increasing interest rates

On Wednesday, Vietnam Technological and Commercial Joint Stock Bank (Techcombank) raised its one month interest rate to 17 percent per year, which will apply from 8-10 December with deposits of more than VND100 million.  As soon as this happen, other joint stock banks, also changed their interest rates to 17.5 and 18 percent a year.


Specifically, the floating interest rate of 36 month deposit of a bank was rebounded up to 18 percent a year, for all deposits over VND5 million.


Ho Huu Hanh, director of the State Bank of Vietnam in Ho Chi Minh City, said he has asked four delegations to investigate the banks about the skyrocketing interest rate.


This discision immediately made some banks reduce their interest rate from 17-18 to 14 percent a year.


An official from Techcombank said, “That it had not increased the interest rate of savings deposit to 17 percent, but it was only a promotional program for those long term customers”.


Furthermore, the State Bank in Hanoi has expressed their disagreement with the rising interest rate, saying it that it gave some banks an unreasonable advantage, which may lead to unfair competition.


Techcombank’s action had lead to a movement of deposits from other banks, forcing them to elevate their interest rates.


Meanwhile, Nguyen Duc Vinh, general director of Techcombank, admitted his bank had not being able to anticipate this affect, and has promised to cancel the program.


After the meeting, thousand of banks, agreed to lower their rate to 14 percent a year.


A spokesperson from the State Bank said, “The inflation rate this year will not exceed 12 percent, so, there is no reason for banks to raise their interest rate to 17-18 percent a year”.


In a related move, the State Bank has pledged to provide loans to smaller banks. All these banks require is to present their credit contracts, to the State Bank, to approve their for loans.


However, a joint stock bank’s leader said, “Some small banks are afraid to borrow capital, because they will be closely monitored by the State Bank, and this will lead to the larger banks raising their interest rates again”.

Source: SGGP

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Banks bring deposit rates to below 15 percent

In Uncategorized on December 16, 2010 at 10:03 am

Commercial lenders lowered their interest rate on the dong deposits to 15 percent on Dec. 13 in accordance with their pleading at the meeting with the central bank earlier.

(Photo:Minh Tri)

Techcombank was among the first lenders reducing the deposit rate, offering the rate of 13.45-13.95 percent per annum.


The Hanoi-based lender, which is the fifth-largest bank in term of assets, triggered an interest rate race last week when announcing it would offer dong depositor rates as high as 17 percent per year.


Other lenders reacted by pushing their own rates up, some as high as 18 percent.
But these offers were rescinded after the central bank requested them to bring the rates down to prevalent market levels – 14 percent or less.


Asia Commercial Bank, known as ACB, also cut its highest deposit rate to 15 percent per year from 15.2 percent, which was earlier the special offering under its promotional pack titled “Making New Year fortunes”.


The government-run banks made a similar move, with Vietcombank lowering its deposit rate to 14 percent and BIDV cutting its rate to 13.5 percent.


Financial experts said the rate of 15 percent is adequate as lending demand at yearend is increasing sharply. However, they noticed that the current deposit rate would force lenders to raise their lending rates to 17-18 percent per year at least.


Vo Quoc Thang, chairman of the Vietnam Young Entrepreneurs Association, said with the lending rate of 17-18 percent per year, local businesses would struggle to cope with the increasing cost of raw materials and the harsh competition from imported products.


Many firms will be willing to make no profit this year to maintain their business, but this plan will be undone if the high lending rates last long, Thang said.


Many financial experts expected the interest rate would decline further on February as lending demand of local businesses cooled off.


They also said high interest rates will help lenders to separate borrowers. Lenders will offer regular and big clients loans with preferential rates. ACB offered an annual lending rate of 15.5 percent only to businesses.


Some small commercial banks, however, shunned the central bank’s request, keeping the interest rate on dong deposits at more than 15 percent. They said they offered the high rates for big deposits only.


These banks will negotiate the interest rate with clients in a face-to-face meeting only in attempt to avoid the central bank’s penalty.


A deputy general director of a commercial bank, who asked not to be named, disclosed many clients tended to deposit their money in the banks offering the highest rate. “Efforts to keep client from switching their money to other banks have seen many lenders offering the rate of more than 15 percent through negotiating,” he said.

Source: SGGP

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Fluctuation on interest rates hits economy

In Uncategorized on November 22, 2010 at 10:14 am

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Lending interest rates up, troubling enterprises

In Uncategorized on November 12, 2010 at 7:53 am

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Banks slash interest rates

In Uncategorized on October 20, 2010 at 7:05 am

Several commercial banks have lowered their deposit and lending interest rates in dong since October 15 as their commitment to the Vietnam Banking Association (VNBA).

Transaction conducted at a Techcombank branch in Ho Chi Minh City

Banks have cut their deposit interest rates by 0.2 percent points to 11 percent per annum.

Asia Commercial Bank was the first bank to apply the new interest rate on October 15.


Vietcombank and DaiA Bank got in line on October 16, followed by BIDV, Eximbank, DongA Bank, and MB Bank.


However, some banks have still maintained their promotion programs by offering money, interest rates and gifts. Therefore, their real interest rates remain unchanged at 11.2 percent per annum.

Vietnambank began lowering the lending interest rate to 11.5 percent on October 16.


Housing Bank of Mekong Delta has reduced its lending interest rates for many enterprises, with the interest rate for agricultural enterprises cut from 14.5 percent to 12-12.5 percent per year, the rate for property and food enterprises slashed from 16 to 13-14 percent and 12.5 to 11.5 percent per annum respectively.


On July 5, the Vietnamese monetary market received the event that commercial banks simultaneously cut deposit and lending interest rates in dong.
 
Through the consensus amongst the members of VNBA, the deposit interest rate of 11.5 percent was reduced to 11.2 percent per year. Lending rate also gradually decreased to about 12.5 percent – 15 percent per year, depending on the prioritized and preferential borrower groups.


Since then, the schedule to continue to cut down interest rates according to the government’s directive (down to 10 percent per year for deposits and down to 12 percent per year for lending) had yet to be done.


It was said that higher interest rates were one of the greatest difficulties for enterprises in 2010.
 
In 2009, many enterprises were in favor of low interest rates, supported by the government’s stimulus policy.
 
In 2010, interest rates increased sharply, plus the exchange rate increased along with material prices pushed up, which boosted production costs, while the expansion of business and markets was hard due to the impacts of the financial crisis.
 
Therefore, the loan interest rate was too high compared to the endurance of enterprises.


On September 27, the State Bank of Vietnam officially issued Circular 19, amending and supplementing a number of important points in Circular 13 to facilitate credit institutions to boost credit growth and mobilize capital.
 
Therefore, the roadmap to lower interest rates was expected to be carried out by banks from October 15.


At a meeting in late September with VNBA, many commercial banks agreed to cut interest rates.

However, banks have worried that the deposit interest rate cut will not enable them to absorb excess capital if depositors expect high returns. Therefore, capital might be directed away from banks and towards higher-yield investments.


A deputy director of a Ho Chi Minh City-based bank, who wished to remain unnamed, said “We must comply with the agreement. However, banks may become involved in a promotional war to attract depositors if new interest rates do not meet customers’ expectations.”


VNBA general secretary Duong Thu Huong said that further interest rate cuts would be executed with prudence with respect for market behavior and depositors’ expectations as inflationary pressures continued to grow during the final months of the year.

Source: SGGP

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Banks urged to slash interest rates

In Uncategorized on October 14, 2010 at 6:27 pm

The Vietnam Banking Association (VNBA) October 1 asked its members to cut deposit and lending interest rates in dong as the agreement was reached by them four months ago.

Transaction conducted at an Eximbank branch in Ho Chi Minh City (Photo: SGGP)

The association asked commercial banks to cut the deposit interest from the current highest level of 11.2 percent per annum to 11 percent per year.


This plan is expected to be in place from October 15.

Duong Thu Huong, VNBA general secretary, said commercial banks will have favorable conditions to lower interest rates because they will easily access cheap funds when the State Bank of Vietnam has amended regulations on the use of deposits for lending.

According to the amended Circular 13, which took effect on October 1, banks are allowed to use up to 25 percent of their non-term deposits for lending, and also to have their deposits with the State Treasury counted as part of their funds for lending.
The amended circular means that banks’ funds for lending are now increased.
 
The association said the Central Bank will also continue to help banks reduce interest rates till the end of this year through its flexible monetary policies.
 
According to VNBA, lowering interest rates down to 11 percent per year is completely feasible, and lending interest rates will follow the deposit rate’s move to go down further in near future.
 
Through the commitment with VNBA at a meeting in late September, many commercial banks are preparing to cut interest rates.

On July 5, the Vietnamese monetary market received the event that commercial banks simultaneously cut deposit and lending interest rates in dong.
 
Through the consensus amongst the members of VNBA, the deposit interest rate of 11.5 percent has been reduced to 11.2 percent per year. Lending rate also gradually decreased to about 12.5 percent – 15 percent per year, depending on the prioritized and preferential borrower groups.


Since then, the schedule to continue to cut down interest rates according to the government’s directive (down to 10 percent per year for deposits and down to 12 percent per year for lending) has yet to be done.

On September 27, the State Bank of Vietnam officially issued Circular 19, amending and supplementing a number of important points in Circular 13 to facilitate credit institutions to boost credit growth and mobilize capital.
 
Therefore, the roadmap to lower interest rates is expected to be carried out by banks from October 15 as explained by VNBA so that its members have enough time to adapt to the new regulations.


At a conference on macroeconomic situation and stock market in September, Dr Cao Sy Kiem, former Governor of the Central Bank, and president of the Association of Small and Medium Enterprises in Vietnam, said that higher interest rates were one of the greatest difficulties for enterprises in 2010.


In 2009, many businesses were in favor of low interest rates, supported by the stimulus policy of the government.
 
In 2010, interest rates increased sharply, plus the exchange rate increases, along with material prices pushed up, which boosted production costs, while the expansion of business and markets was hard due to the impacts of the financial crisis.


According to an analysis of Dr Kiem, loan interest rate is too high compared to the endurance of businesses.

Loan interest rate is now standing at 14 percent – 15 percent per year, if companies achieve profitability rate of 20 percent, the rest must also cover many other expenses.

Accordingly, many cases of high-interest loans can bring losses to business, or make profits decline.

Source: SGGP

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Nha Trang hotels slash rates to attract tourists

In Uncategorized on August 14, 2010 at 3:25 pm




Nha Trang hotels slash rates to attract tourists


QĐND – Saturday, August 14, 2010, 20:52 (GMT+7)

Hotels in Khanh Hoa Province, home of the world-renowned Nha Trang Bay, are offering discounts of up to 50 percent to attract tourists.


The province’s Department of Culture, Sports and Tourism has said the discounts are aimed at enabling the tourism sector to achieve its target of attracting 1.76 million visitors and earning VND1.75 trillion (US$92.2 million) this year.


The five-star Evason Ana Mandara & Six Senses Spa in Nha Trang is offering discounts of 10 to 50 percent between May 1 and December 31.


The Sunrise Nha Trang Beach Hotel & Spa also has a promotion offering free stays for guests staying three days and longer between May 1 and September 30.


Other three- to five-star hotels like the Nha Trang Lodge Hotel, Liberty Hotel, Hai Yen Hotel, and Vinpearl Land Resort & Spa Nha Trang are offering discounts of 10 to 30 percent.


Khanh Hoa has more than 400 hotels, resorts, and guest houses, almost all of them in Nha Trang, which is home to one of the world’s most beautiful bays.


It has 20 hotels rated three-star and above with a total of 2,450 rooms.


The city has attracted around 500,000 visitors this year, with the tourism industry earning VND500 billion (US$26.5 million).

Source: tuoitrenews.vn

Source: QDND

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Hanoi’s hotels see higher occupancy rates

In Uncategorized on July 15, 2010 at 9:02 am




Hanoi’s hotels see higher occupancy rates


QĐND – Sunday, July 11, 2010, 21:26 (GMT+7)

Occupancy rates of 3-5 star hotels in Hanoi rose to 54.52% in the second quarter of the year, a year-on-year increase of 10.26%.


Four-star hotels registered the highest average increase overall, up 53.09%.


This was attributed to the 12% increase of foreign and 13.5% increase of domestic tourists to the capital city, in the first half of 2010.


During this period, the average daily rate (ADR) of five-star hotels experienced the biggest decrease of 20.36% to US $119.9 per room and four-star hotel room decreased, 1.54% to US $65.74. The three-star hotel ADR posted an increase of 4.93% to US $39.17.


Meanwhile, the average daily revenue per occupied room in three-star hotels posted the highest increase of 26.1% to US $22.42, followed by four-star hotels, 6.26% to US $36.58.


Experts say the grand ceremony of the Thang Long-Hanoi millennium anniversary and the Vietnam National Tourism Administration’s promotion campaign are expected to raise the number of visitors to Hanoi in the second half of the year, and according hotel room occupancy rates.


During the six-month period, Vietnam welcomed 2.5 million foreign visitors, a yearly increase of 32.6%, and 14.8 million domestic tourists, up 10%.


Source: VNA/Nhandan


Source: QDND