NỘI – The central bank has targeted keeping interest rate stable in 2017,
however, the market’s developments in the first half of January 2017 show
that lending rates are suffering from many pressures, theNgười
newspaper has reported.
Analysts said the goal to
stabilise interest rates this year may face many challenges, such as the
recovery trend of commodity prices in the world market, including petroleum;
the price adjustment of essential commodities of electricity, health service
and education; and the risks of climate change and natural disaster.
Besides this, economist Bùi
Quang Tín said the exchange rate will also put pressure on interest rates in
Tín said the US dollar is
forecast to continue strengthening due to the expectation that Fed will
continue increasing interest rates this year and in 2018 and 2019. This trend
will make it difficult for local commercial banks to reduce interest rates
because at that time, the exchange rate between the US dollar and other
currencies, including the đồng, will hike.
If Việt Nam lowers interest
rates, it will make the US dollar/đồng exchange rate increase, resulting in
imported goods becoming expensive and making it difficult for businesses, he
In addition, the central
bank’s regulation on reducing the ratio of using short-term capital for
medium and long-term loans from 60 per cent to 50 per cent fromJanuary 1,
2017, will also affect deposit rates, especially terms that are more than 12
Prime Minister Nguyễn Xuân
Phúc also admitted interest rate is a serious problem for the central bank in
2017, especially in the context that inflation must be curbed and the macro
economy must be stabilised. The country this year is targeting a GDP growth
of 6.7 per cent and inflation at some four per cent.
In a bid to stabilise
interest rate and control inflation, Tín suggested the central bank adjust
inter-bank rates reasonably through the open market operation (OMO).
Commercial banks can borrow capital from the OMO market to stabilise
liquidity and deposit interest rates.
Besides preparation to cope
with the US’s Fed policy on increasing interest rates, measures to support
commercial banks enhancing medium- and long-term capital sources must be also
taken, Tín said.
Economist Ngô Trí Long
recommended the government continuously regulate prices of petroleum,
electricity and public services according to the market mechanism with the
in the prices of such commodities and services must be considered carefully
and taken at a suitable time to avoid strong negative impact on the price
level, Long said. - VNS