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VN central bank further cuts benchmark interest rate to aid economy

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The State Bank of Vietnam (SBV) on September 30 announced its decision to lower the benchmark interest rate as part of efforts to support the national economy amid difficulties posed by the COVID-19 pandemic.

Central bank further cuts benchmark interest rate to aid economy hinh anh 1

The central bank further cuts benchmark interest rate to aid economy (Photo: VNA)

From October 1, the refinancing interest rate will be cut to 4 percent per annum from 4.5 percent, while the rediscount interest rate will go down to 2.5 percent from 3 percent.

The overnight electronic interbank rate and rate of loans to offset capital shortage in clearance between the SBV and credit institutions will be lowered to 5 percent per annum from 5.5 percent.

The central bank also decided to cut the interest rate of bids of valuable papers through open market operations from 3 percent per annum to 2.5 percent.

Regarding the maximum interest rate for deposits in Vietnam dong (VND) by organisations and individuals at credit institutions and foreign bank branches, the SBV stipulates that the maximum interest rate applicable to demand deposits and those of less than one month is 0.2 percent per annum.

The maximum interest rate applicable to deposits with terms from one month to less than six months will fall to 4 percent per annum from 4.25 percent.

The maximum rate for deposits with terms of one month to less than six months at people’s credit funds and microfinance institutions will be cut to 4.5 percent per annum from 4.75 percent, while interest rates on deposits with a term of six months or more will be determined by credit institutions on the basis of market capital supply and demand.

Notably, loans to borrowers in a number of regulated fields and economic sectors have been cut to 4.5 percent per annum from 5 percent. The maximum short-term lending interest rate in VND at people’s credit funds and microfinance organisations for these capital needs is now down from 6 percent per annum to 5.5 percent.

According to the central bank, since early this year it has synchronously operated monetary policy tools to control inflation, stabilise the macro-economy and the monetary market, and reduce the market interest rate to support economic recovery amid the COVID-19 pandemic./.VNA

Source: https://vietnamnet.vn/en/business/central-bank-further-cuts-benchmark-interest-rate-to-aid-economy-677770.html

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Vietnam Airlines receives multimillion-dollar bailout package as state investment

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State Capital Investment Corporation (SCIC), the investment arm of the Vietnamese government, is looking to funnel VND8 trillion (US$347 million) into the charter capital of the flagship air carrier Vietnam Airlines.

On Thursday, Nguyen Chi Thanh, CEO of SCIC, revealed that the state-owned company is working with Vietnam Airlines to settle the share prices for the airline’s incoming offerings.

As per the government’s Resolution 194 on the bailout for Vietnam Airlines in light of the COVID-19 crisis, the air carrier is allowed to offer more shares to existing shareholders to increase its charter capital. The government has assigned the SCIC to buy shares of Vietnam Airlines.

While Vietnam Airlines is devising the plan to increase its capital via share offering before submitting it for appraisal of the State Securities Committee, SCIC is working to set an offering price that matches the market evaluation, Thanh said.

According to the SCIC leader, in order to set a proper price, Vietnam Airlines must figure out its corporate value, which in turn requires a business plan for no less than five years.

However, the business has yet to provide a long-term business plan as its future are still kept in limbo, with the date for resumption of international flights – a significant baseline for the plan – is still largely uncertain.

“As the development of the pandemic on the world remains unpredictable, it is hard to establish a business plan for Vietnam Airlines. Without it, we can’t assess the value of the company. Only when Vietnam Airlines returns on international routes can its business operation recover,’ Thanh remarked.

On behalf of SCIC, Thanh suggested enlisting the help of a reliable international auditing firm to assess the corporate value of Vietnam Airlines.

Meanwhile, SCIC will continue working closely with the airline and report to the Committee for Management of State Capital at Enterprises as well as other relevant authorities to ensure the efficiency and lawfulness of the investment process.

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Source: https://tuoitrenews.vn/news/business/20210116/vietnam-airlines-receives-multimilliondollar-bailout-package-as-state-investment/58820.html

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Think tank forecasts 6.46 percent growth for Vietnam

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Think tank forecasts 6.46 percent growth for Vietnam

A container ship docks at Ben Nghe Port in Ho Chi Minh City. Photo by Shutterstock/Claudine Van Massenhove.


A government think tank has pegged economic growth at 6.46 percent this year thanks to the country’s success in containing the Covid-19 outbreak and maintaining stability.

Vietnam is one of the fastest recovering economies in Asia, the Central Institute for Economic Management (CIEM) said in a report.

In the best case scenario, credit growth would be 13 percent against 10.1 percent last year, it said.

But it also warned of risks that could hamper growth, like the unpredictable global economic situation as the pandemic situation remains severe in many countries and possible anti-dumping and countervailing investigations by the U.S. and other countries.

Several international organizations have forecast a strong recovery for Vietnam this year, with lender HSBC forecasting growth of 7.6 percent. The International Monetary Fund and Asian Development Bank have forecast 6.5 percent and 6.1 percent growth.

The government has set a target of 6.5 percent.

Source: https://e.vnexpress.net/news/business/economy/think-tank-forecasts-6-46-percent-growth-for-vietnam-4221938.html

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SCIC to invest VND8 trillion in Vietnam Airlines

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A Vietnam Airlines plane – PHOTO: ANH QUAN

HCMC – The Government’s investment arm, State Capital Investment Corporation (SCIC), plans to invest VND8 trillion in Vietnam Airlines, SCIC general director Nguyen Chi Thanh announced on January 14.

In accordance with the Government’s Resolution 194 on supporting Vietnam Airlines to overcome difficulties caused by the Covid-19 pandemic, the national flag carrier will issue shares to its existing stakeholders to raise its charter capital. SCIC would represent the Government, which owns 86% of the national flag carrier, to buy the shares.

Thanh said Vietnam Airlines is drawing up the share issuance plan, which will be submitted to the State Securities Commission of Vietnam for consideration, and working with SCIC to determine the issue price.

According to the SCIC leader, to determine the issue price, Vietnam Airlines and SCIC have to evaluate the carrier’s enterprise value, which is based on its business plan for the next at least five years.

“The Covid-19 pandemic is still developing complicatedly globally, making it hard to determine Vietnam Airlines’ business plan. We cannot evaluate the carrier’s enterprise value without the business plan,” Thanh said.

SCIC has selected a world-renowned audit firm to help evaluate the enterprise value of Vietnam Airlines. SCIC is also working with the airline, the Commission for the Management of State Capital at Enterprises and other relevant agencies to ensure effective, careful and lawful investment in Vietnam Airlines.

Source: https://english.thesaigontimes.vn/80183/scic-to-invest-vnd8-trillion-in-vietnam-airlines.html

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