Short-term lending rates in Vietnamese dong have risen strongly in the past week and are expected to stay high, supported by robust corporate demand to settle year-end payments, bankers said on Monday.
Rates on overnight dong loans jumped about 200 basis points to the ceiling regulated by the central bank at 12 percent from 9-10 percent a week ago, bankers at foreign banks in Hanoi said.
"Everyone is on the hunt for dong funds and that would traditionally continue until at least until the end of December, said one banker who declined to be identified by name.
Year-end demand for funds in Vietnam is normally pushed up by corporate debt repayments, bonuses and consumer spending.
Bankers said tight dong liquidity had forced the government to step up open market operations to record levels of up to 15 trillion dong per day from an average level of 5-7 trillion dong to keep rates down in the bond and money markets, but rates were still hovering in a 12-15 percent range in the past week.
On the dollar front, bankers said liquidity was good with interbank trading at around 19,000 dong per dollar, still about 500 dong outside the central bank's regulated limit of 18,500 dong per dollar.
On the unofficial markets, such as in gold shops where residents buy and sell foreign currencies, the dollar was quoted at 19,500 dong per dollar on Monday, slightly up from last's week average of around 19,450 dong per dollar, dealers said.
They said importers of so-called "non-essential" goods such as cars and other consumer products still have to buy dollars from the black markets and demand from the sector has been picking up ahead of the traditional Lunar New Year Festival which falls in February 2010.
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