HANOI, June 10 (Xinhua) -- The State Bank of Vietnam, the country's central bank, decided Tuesday to increase the prime interest rate, the basic rate for commercial banks to form trading interest rates, including both deposit and lending rates, to 14 percent from 12 percent, in a move to curb inflation.

    The central bank also decided to raise the refinancing rate to 15 percent from 13 percent, and the re-discount rate to 13 percent from 11 percent, according to the bank's Monetary Policy Department. The three new rates take effect on June 11.

    With the higher prime rate, commercial banks, which currently offer annual deposit interest rates of around 14 percent and lending rates of up to 18 percent, will raise deposit rates by several percentage points, and lending rates to 21 percent at maximum.

    This is the third time that the central bank has raised the three key interest rates since Feb. 1. Before February, it kept the rates unchanged for over three years.

Vietnamese PM assures government's ability to stabilize currency

    HANOI, June 9 (Xinhua) -- The Vietnamese government is capable of interfering in the foreign exchange market to stabilize Vietnamese dong (VND) when needed, and will ensure information transparency crucial to gaining public trust of the currency, local newspaper Vietnam News on Tuesday quoted Prime Minister Nguyen Tan Dung as saying.

    The recent appreciation of the U.S. dollar over VND in the free market was mainly triggered by speculation, he said. The government ruled out any plans to depreciate the currency in the foreseeable future.

    "Given the country's current balance and the overall economic situation, there is no reason for a devaluation," the prime minister stated.   Full story