Vietnam cuts 2010 money supply target to 20 pct

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The Vietnamese government has told the central bank to keep the country's money supply growth target this year at around 20 percent to help control inflation, lowering it from a previous target of 28 percent.

The State Bank of Vietnam should pursue its flexible monetary policy and ensure annual credit growth of 25 percent, the government said in a statement issued late on Tuesday.

In February the central bank raised the money supply growth target for 2010 to 28 percent from 25 percent.

The government said consumer prices rose 9.46 percent in a year to March, the highest inflation rate in a year. Some economists had expected the central bank to increase interest rates to control inflationary pressures.

But business executives say banks' lending rates of 18-19 percent were too high and on Tuesday the government told the central bank to instruct state-owned banks to cut rates "to the level accepted by the market."

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