Vietnam's dong may fall as dollar loans mature: report

TN News

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Vietnam's dong may fall at the end of this year when companies' dollar loans come due, the Lao Dong newspaper reported, citing Le Xuan Nghia, vice-chairman of the National Financial Supervisory Commission.

Dollar loans jumped 23 percent in the first six months of the year, compared with 3 percent for lending in dong, Lao Dong said. Companies chose to borrow from banks in the US currency instead of dong because interest rates are much lower, it said.

Commercial banks charged borrowers as much as 8 percent for dollar loans, compared with 25 percent for those in dong, according to a statement on the central bank's website July 19.

Policy makers may raise the compulsory reserve ratios for dollars at banks to reduce lending, according to Lao Dong, citing Nghia.

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