Vietnam will maintain an easing bias in its monetary policy to support the government's efforts to boost the economy, while keeping prices and interest rates stable, the central bank governor said on Monday. The central bank will also maintain flexibility in using instruments of monetary policy, State Bank of Vietnam Governor Nguyen Van Giau said in an interview published by the government's website (www.chinhphu.vn).
"Going forward, the State Bank of Vietnam will continue to enact monetary policy in the direction of loosening in a way that is appropriate," Giau said. He did not give further details. The State Bank of Vietnam said it would keep key interest rates steady in May. Giau said loans extended by the banking sector at the end of April were 11.16 percent higher than at the end of 2008, while M2 money supply for the first four months rose 11.4 percent from end of last December.
Lending last month picked up strongly under the government stimulus package, accounting for the bulk of the four-month growth after an expansion of just 2.67 percent at the end of March from late 2008.
Vietnamese banks have raised interest rates further or offered cash bonuses for dong deposits to attract the funds needed to fuel lending, bankers said on Monday. The central bank has projected Vietnam's credit growth this year at 21-23 percent, after its monetary tightening measures to contain inflation early last year slowed loan growth to 21-22 percent from a surge of 54 percent in 2007.