Vietnam central bank cuts reserve ratios for some banks

Vietnam's central bank said on Thursday it was cutting the reserve ratios of four banks and another fund that have a large ratio of loans in agriculture.

The central bank said the reserve ratios of the country's top lender Agribank, Vietnam International Bank , Kien Long Bank and Mekong Housing Bank would be cut to one-fifth of the standard level.

The normal rate for Agribank is 1 percent, but bankers say the ratios differ from bank to bank and according to the type of capital.

The central bank also said the government-administered Central People's Credit Fund would have its reserve ratio cut to one-20th of its normal ratio.

A statement on the State Bank of Vietnam's website, www.sbv.gov.vn, said the new ratios were taking effect in December.

The central bank in October cut reserve ratios for unspecified banks and institutions that lend to the agriculture sector. Some 70 percent of Vietnam's population of 86 million people live in the countryside.

The measure comes as the authorities try to balance their desire for growth with what economists and international organizations, including the International Monetary Fund and World Bank, see as a pressing need for more macroeconomic stability.

Credit grew this year 25-27 percent, central bank Governor Nguyen Van Giau said this week. The IMF said the targeted rate of 25 percent was too high for the economy and future targets should be set lower to keep a lid on inflation.

Source: Reuters

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