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VN strives to lower interest rates, curb inflation

VGP – The Vietnamese Government will take concrete measures to curb inflation, decrease interest rates and start applying the Petrol Price Stabilizing Fund, government officials answered the press during the Government’s Regular Meeting of March yesterday (April 1).

04/02/2010 07:10

Besides, Việt Nam will also focus on maintaining its macro-economic stability and thriving for a growth pace of 6.5% this year, Minister- Chairman of the Government Office Nguyễn Xuân Phúc reported.

He further explained the strategies which the Government has adopted to fulfill the pre-set targets, such as allowing financial institutions and borrowers to negotiate for interest rates of commercial loans for effective projects, launching the the Price Stabilizing Fund or delaying tax payments to adjust petrol price, maintaining the current prices of electricity and coal sold for the power generation, and tightly controlling the prices of strategic products such as cement, sugar and steel.

The Government also appointed an inter-sectored inspection team to inspect projects that use the State budget, and to stop allocating capital to ineffective projects.

Deputy Governor Nguyễn Đồng Tiến of the State Bank of Việt Nam said that banks will soon apply negotiated interest rates for short-term loans to support effective production or business projects. This means banks will not be subjected to the current loan interest rate cap of 12% a year.

The State Bank was assigned by the Government to propose measures to slash down the loan interest rate which is still high and causes difficulties for both banks and enterprises.

“The bank is currently discussing measures to supply capital for the market in a long-term manner such as the conducting open market operations and re-financing, while controlling unsound competition and maintaining monetary trust to lower interest rates in the coming time,” Mr. Tiến stressed.

Relating to the “release” of the Petrol Price Stabilizing Fund, a legal document was issued by the Ministry of Finance to stop traders from raising petrol prices but permit them to use the fund to offset losses, Deputy Minister of Finance Trần Văn Hiếu said.

The Ministry has proposed the Prime Minister to extend the interval between price adjustments from 10 days to 30 days. It also urged major petroleum trading enterprises to slash prices if the world prices drop. And in case of the world prices suddenly surge, they should report the two ministries of Finance, and Industry and Trade, he continued.

“Prices of petroleum products in Việt Nam are not high now,” the Deputy Minister said, “the current retail prices of RON 92 in Việt Nam stands at VND 16,900 per liter, meanwhile the figure in Singapore is VND 24,158, Laos VND 16,970, Cambodia VND 19,864, Hong Kong VND 35,272 and China VND 19,072,” Mr. Hiếu said.

By Ngọc Vân