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Impact of Interest Rate on Economic Development in Vn Essay

  • Submitted by: BlueSkyFtu1
  • on March 25, 2014
  • Category: English
  • Length: 1,977 words

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Below is an essay on "Impact of Interest Rate on Economic Development in Vn" from Anti Essays, your source for research papers, essays, and term paper examples.

Actual situation in Vietnam
Impact of interest rate on economic development in Vietnam
Interest rate policy in Vietnam is utilized as a tool of monetary policies and its overall goals are monetary stability, inflation control, supporting economic growth and macroeconomic stability. The State Bank of Vietnam (SBV) is responsible for monitoring the interest rate policy, which has been modified several times to adapt the new periods and to achieve interest rate liberalization in the long run. Interest rates have been gradually liberalized since 1990s. From 1989 to May 1992, the fixed interest rate policy was conducted. Interest rates were adjusted following CPI’s fluctuation, and the foreign interest rate was determined following the interest rate on the international monetary market. From June 1992 to 1995, interest rate bracket was applied. The SBV set deposit as well as lending rates and, since October 1992, ceiling for lending rates and floors for deposit rates. Commercial banks, credit institutions would issue appropriate interest rate based on the interest rate bracket; and this was a transition from negative real interest rate mechanism to positive real interest rate mechanism. It was also the primal interest rate mechanism on moving toward the interest rate liberalization. From 1996 to 2000, the flexible interest rate cap mechanism was substituted for the interest rates bracket, moderately liberalized deposit rate and made lending rate cap flexible. Major steps towards market-determined interest rates were taken with the lifting of floors for deposit rates with the exception of foreign currency deposits in 1996 and of ceiling on lending rates in August 2000. From August 2000 to May 2002, the ceiling for lending rates were replaced first by a base interest rate, which was announced by the SBV every month and which commercial bank could only exceed within a set margin. Interest rates for foreign currency loans were liberalized in July 2001 and lending rates...

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Impact of Interest Rate on Economic Development in Vn. Anti Essays. Retrieved December 10, 2018, from the World Wide Web: http://parimatchstavki7.com/free-essays/Impact-Of-Interest-Rate-On-Economic-599380.html