This is slightly different compared to interest rate policies in previous years when interest rates were adjusted down by 4-5 percent. CPI in the first half of 2015 increased slightly due to the higher price of some raw materials and oil and gas. When CPI is low, the interest rate must be lowered accordingly. When CPI rises, the nominal interest rate must increase to maintain the real interest rate.
The State Bank of Vietnam said it will maintain the fixed exchange rate that was set at the beginning of the year. The interest rate for deposits in USD is from 1-2% while VND is from 5-6%.
Credit growth in the first 5 months reached 5.2%, higher than the previous year. Higher credit growth means higher demand for loans. However, a limited supply of loans creates pressure on interest rates.
The State Bank of Vietnam affirmed that the macro-economy has developed as expected since the beginning of the year. However, to keep interest rates stable and lowering long-term interest is the responsibility of the whole banking system.
