The State Bank of Vietnam on Friday’s evening asked financial institutions and banks to report on foreign currency deposits of state conglomerates by the end of next Friday.

The report will have to cover all foreign currency deposits recorded until the end of this month of 21 state conglomerates and the affiliates.

This is the next move after Prime Minister Nguyen Tan Dung Thursday required major state-owned companies to sell all their foreign currency to banks in an effort to support the beleaguered dong.

Banks would sell them dollars at the official exchange rate when they need them, he said.

The Prime Minister Thursday also approved a series of measures to tighten monetary and fiscal conditions to control inflation and re-balance the economy, after a devaluation and interest rate rises earlier this month.

As the deposit interest rate applied for those state-run group is 1 percent per annum, they do not want to sell their dollar to the banking system unless banks agree to buy it at the free market’s price, around VND1,000 pricier.

Focus on production sector

To limit capital flow into non-production sector, especially the real estate and stock markets, the central bank Friday also asked bank to strictly follow the credit growth cap of 20 percent this year.

The SBV will flexibly raise banks’ reserve requirement and other safe indicators to prevent risky operation and channel capital to production sectors. It will also keep an eye on the purchase of corporate bonds to prevent banks from lifting their highly-charged lending to corporate bond speculation.

It will also be flexible in managing interest rate to cope with inflation and business expectation.

Derivative banking operations and monitoring will also be deployed to put the foreign currency exchange and gold market under control.

Source: Tuoi Tre