Vietnam’s Central Bank to Loosen Monetary Policy

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Feb. 3 – Vietnam's central bank said it will continue to ease monetary policy this year by cutting more benchmark interest rates.

State Bank of Vietnam Governor Nguyen Van Giau said, the policy would be flexible to “stabilize the macro economy and prevent a [balance of payments] deficit.”

He added that credit growth could be 3.2 to 3.5 times that of the gross domestic product this year while the government expects GDP to grow by 6.5 percent.

Credit growth in 2008 was estimated at 21 to 22 percent. Giau said the central bank, would carefully calculate when it cuts its key interest rates.

On February 1, Vietnam cut its key interest rate to 7 percent when last year's figures showed that the economy grew by its slowest pace in a decade.

Vietnam's economy expanded by 6.23 percent last year after growing at a record 8.5 percent in 2007, according to the General Statistics Office.