Vietnam's central bank has asked commercial lenders to set "suitable" deposit and lending rates following a recent surge in levels.
The interest rates must be in line with government policy and the consensus of the Vietnam Bank Association, the State Bank of Vietnam said in a statement filed on its website Wednesday. It didn't elaborate on what it deems appropriate rates.
Some Vietnamese commercial banks have raised deposit rates to as high as 18 percent, online newswire VnEconomy reported Wednesday, without naming the banks.
"Some lenders have problems with liquidity and have had to raise deposit rates to get more funds," said Le Duc Tho, deputy general director of Vietnam Joint-Stock Commercial Bank, known as VietinBank. "The surge in interest rates could cause a domino effect and lead to a movement of funds to banks that offer higher rates," Tho said, adding that lending rates would be raised to a high level as a result.
The State Bank of Vietnam also asked domestic banks to maintain sufficient funds to cover deposits of the State Treasury, businesses and individuals in December, especially in the run-up to the Tet Lunar New Year holiday in February.
Vietnamese Prime Minister Nguyen Tan Dung last week asked the country's central bank to stabilize the foreign exchange market as well as gold prices.
Dung called on the bank to continue operating monetary policy in a "flexible and proactive" manner, including ensuring sufficient liquidity for the economy and the banking system. He didn't mention specific measures by which to achieve this goal.
Vietnam needs a "coherent package" of measures including higher interest rates to re-establish its monetary policy credibility and slow inflation, the International Monetary Fund said Tuesday.
The central bank raised interest rates on Nov. 5 for the first time in almost a year, a day after the chairman of the National Financial Supervisory Commission said curbing inflation was a greater priority than boosting economic growth.
Inflation accelerated for a third month in November, with consumer prices rising 11.09 percent from a year earlier, the highest rate since March 2009, when they rose 11.25 percent.