State bank allows forex swaps to offset dong scarcity

Posted by Posted by kieu lu On 7:06 AM

State bank allows forex swaps to offset dong scarcity



Banks in Vietnam in need of short-term dong funds after a surge in lending under a government stimulus package can use foreign exchange swap deals with the central bank to meet their needs, the central bank said.

The annual swap rate is 8 percent and banks licensed to trade in foreign exchange would be allowed to conduct swaps, subject to central bank permission, the State Bank of Vietnam said in a letter sent to banks seen by Reuters Tuesday.

Bankers said Monday they had ample dollar funds following a rare trade surplus in the first quarter. But a central bank weekly report said banks had raised the interest rates on dong deposits by 0.1-0.3 percent in the past week, showing some of Vietnam’s more than 40 commercial banks may be in need of dong funds.

Banks have been speeding up their disbursement of dong loans under a government program that subsidizes interest in a bid to support exports and domestic production. Loans under the package totaled VND178.72 trillion (US$10 billion) as of last Thursday, central bank figures showed.

Source: Reuters

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