REVIEW
of
FINANCE -
Apr. 2018
49
dated December 11
st
, 2008 of the Government with
the aim to unblock the CB in lending at negotiable
rates between the borrower and the lender.
- Carring out strict inspection and preventing
the situation of exceeding the ceiling interest rate
of commercial banks (Document No. 9484/2009/
VB-NHNN dated February 21
st
, 2009). With
the basic interest rate maintained at 7%/year,
commercial banks raised the deposit interest rate
to a peak of 10.5% /year (excluding special offers,
sweepstakes, bonuses and others are indirectly
added to raise deposit interest rates over the
ceiling interest rate as prescribed.
In addition, many commercial banks applied
the highest deposit rates of 10.49% or 10.50%/year
for most terms. Therefore, the interest rate curve
tends to be blurred (IMF, 2012).
- Encouraging commercial banks to strictly
control credit risks in credit granting to customers,
limit and focus on bad debt management through
implementing tight monetary policy by adjusting
base rate (at the end 2009). That the increase in
interest rates has led to an increase in deposit
rates and lending rates makes the commercial
banks more rigorous to select object for loans that
included prestigious customers concern, efficient
business operations, high Return on Investment
(ROI) and high cost of capital.
As a result, the economic growth rate in 2009
tended to improve gradually over the quarter
due to the recovery of investment demand
and domestic consumption by the impacts of
Government’s economic stimulus measures:
SOLUTIONS FOR INTEREST RATEMANAGEMENT
WITHTHE OBJECTIVES OF ECONOMIC GROWTH
CAO VIET HIEU, PhD.
- Binh Duong University*
International economic integration has given Vietnam opportunities to grow strong. However, besides
the advantages, the context of integration also has posed many challenges, in which the economy is
increasingly affected by the external environment and the movement of capital flows among nations is
rising sharply. Thus, the role of controlling the total amount of money in the economy and stabilizing the
exchange rates and interest rates are causing the management of interest policy a lot of difficulties.
Key words: Interest rate, interest rate policy, currency, Bank, State Bank, Commercial Banks.
Received: December 10
th
, 2017
Revised: January 2
nd
, 2018
Accepted for publication: January 22
nd
, 2018
The process of interest rate management in
Vietnam after the period 2007-2008
Due to the impacts of the financial crisis in
2007-2008, the Vietnam economy has seen signs
of recession. Facing this situation, the State Bank
of Vietnam (SBV) has not only run a flexibly
expansionary monetary policy and demand
stimulation in order to prevent the risk of economic
recession but has also controlled the inflation
prudently. The prudently loose monetary policy
implemented in early 2009 has created incentives
for production stimulation, export promotion, and
macroeconomic stability. Specifically, during this
time, the interest rate policy was governed by the
SBV following market volatilities such as:
- Adjusting the base interest rate down to 7%/
year from February 2
nd
, 2009, the highest lending
interest rate to 10.5%/year in order to facilitate
Commercial Banks (CB) in credit expansion to
meet capital needs for businesses in the economy.
- Still managing the interest rate policy towards
reducing the interest rate for business loans but
tend to float interest rates as agreed to consumer
lending contracts in order to ease interest rate
stress in lending activities of commercial banks
(Circular No. 01/2009/TT-NHNN dated November
23
rd
, 2009). This comes from the direction from
Resolution No. 23/2008/NQ-CP dated December
11
st
, 2008 of the 12
th
National Assembly at its fourth
session and the Resolution No. 30/2008/NQ-CP
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