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U.S. dollar deposit rate maintained at 0%
Thursday,  Dec 21, 2017,23:15 (GMT+7)

U.S. dollar deposit rate maintained at 0%

HCMC – The State Bank of Vietnam (SBV) will continue keep the interest rate on U.S. dollar deposits at 0% despite proposals for raising it to 0.25-0.5% a year, Tuoi Tre newspaper reports.

At a meeting between SBV and SBV’s HCMC branch on Tuesday, Nguyen Hoang Minh, deputy director  of the SBV’s HCMC branch, said the U.S. Federal Reserve (Fed) had hiked the rate three times but the 0% rate on U.S. dollar savings in Vietnam has been maintained for more than two years.

Therefore, many enterprises and experts have proposed increasing the rate, saying the Fed might increase the rate further, causing some negative impacts including foreign currency outflows. The hike is indispensable to attract U.S. dollar holders as many of them have withdrawn their deposits from banks to invest overseas.

These firms and experts agreed that the policy to keep the U.S. dollar deposit rate at 0% had effectively helped the country stabilize the foreign exchange market.

According to SBV’s HCMC branch, the policy has left positive impacts since it began at the end of 2015. Many people have shifted to making deposits in Vietnam dong, instead of U.S. dollar.

Foreign currency capital now accounts for only 12% of the total while the proportion was 19-22% in the 2010-2015 period.

SBV deputy governor Dao Minh Tu said the central bank has bought an additional US$8 billion this year. SBV will work towards stopping foreign currency lending soon.

Tu also asked SBV’s HCMC branch to direct commercial banks to ensure sufficient supply of cash for their automated teller machines (ATMs). As for ATMs located at industrial parks and export processing zones, banks will have to send staff to support enterprises to pay salaries in cash.

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