State Bank of Vietnam's Monetary Policy Department on October 24 assessed that foreign investors' changes to their investment portfolio has caused high pressure on the US dollar/dong forex rate. The department said that in particular the global financial rout had forced investors in Vietnam to restructure their portfolios. Between October 1 and 22, foreign investors on Ho Chi Minh Stock Exchange (STC) sold off government bonds for nine trillion dong (US$542 million)
From October 21, right after the State Bank of Vietnam (SBV)'s decision of reducing the basic interest rate, commercial joint stock banks such as SCB, OceanBank, SeABank, ABBank, Techcombank, VPBank, Trust Bank and ACB started to reduce dong deposit rate strongly. An Binh Commercial Joint Stock Bank (ABBank) on October 21 officially reduced deposit rate by 1-1.5% for all terms. The bank now applies a dong deposit rate of 16.5% per year for three-month term, six months at 16.75%, nine months 16.4% and 12 months at 16.3% per year.
China, 22 October 2008: Saigon Thuong Tin Commercial Joint Stock Bank (Sacombank) is the only Vietnamese Bank chosen to attend the fifth China - Asean Trade Fair (CAEXPO) at Nanning City, Guangxi, China from 22 October to 25 October, 2008. This year, there are more than 3,300 international standard booths exhibited at the Fair. The exhibition consists of four pavilions, namely Pavilion of Commodity Trade, Pavilion of Investment Cooperation, Pavilion of Agricultural Applicable Technology and Pavilion of Cities of Charm
Deposit and lending interest rates are still not down. Dong lending interest rates remain high, hence, businesses prefer US dollar loans to dong loans. While people tend to switch from US dollar deposits to dong deposits because of the large difference in interest rates between US dollar and dong deposits, together with the weakening forex rate