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Monday November 13, 2:43 PMVietnam Money-Corporate demand for funds rise, rates upHANOI, Nov 13 (Reuters) - Interest rates on overnight and six-month loans in the Vietnamese dong firmed on Monday even though funds were ample, indicating a stronger corporate borrowing demand for longer term funds, bankers said.State-run banks, Vietnam's key lenders, bid for overnight dong loans at 6.6-6.8 percent this week, from 6.4-6.8 percent last Monday and 5.9-6.2 percent two weeks ago . Six-month loan rates extended to 8.2-8.7 percent from a range of 8.2-8.6 percent in the past month. "Most banks have maintained sufficient short-term funds thanks to strong dong deposits so far this year but everyone is after the longer-term funds," said a banker in Hanoi. "In the next five years demand for long-term loans with maturity of between three to five years or even longer from large companies for capital investment is huge," another banker said. Businesses in Vietnam, which has posted an average economic growth rate of 7.4 percent over the past five years, have said they need more funds to invest in infrastructure to raise competitiveness. This week, state-run shipping firm Vinalines said it would need to invest 51 trillion dong ($3.2 billion) in the next five years to expand its fleet to meet higher exporter demand. State oil firm Petrovietnam also said it was seeking $6.8 billion in investment for a string of petrochemical projects including an oil refinery, gas pipelines and plastic factories in the next five years. On the dollar front, the central bank set the official exchange rate for interbank market transaction at 16,052 dong per dollar, down 1.13 percent from the end of 2005. The central bank has said it would allow the non-convertible dong to fall in 2006 against the dollar at a pace similar to last year, when it fell nearly 1 percent. |
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