Vietnam's monetary policies to hold as foreign reserves pass $35 bil

By Anh Vu, Thanh Nien News

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The central bank promised to keep monetary policies stable while attempting to cut interest rates as soon as possible during a Monday conference.
During the annual meeting between Prime Minister Nguyen Tan Dung and local business leaders, Nguyen Van Binh, Governor  said foreign currency reserves have exceeded their all-time high of US$35 billion.
He said monetary policies will “surely remain stable until the end of the year, so businesses can feel safe about building plans for the future.”
Binh said forex rates would hold steady (barring a 1 percent adjustment), while interest rates are expected to start falling 1-2 percentage points, annually, by the end of the year.
Addressing complaints about high interest rates (15 to 20 percent on older loans) in light of the premier's call for rate cuts early last month, Binh said only 16 percent of the current loan values are charged at a rate of higher than 13 percent, and only 5 percent are charged higher than 5 percent.
He said that by July 2012, 70 percent of loans were subject to interest rates of over 15 percent.
The governor said that most of the remaining high-interest rates were placed on riskier loans extended for consumption, property investments and overdue loans.

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