Bank of Vietnam surprises market with 1% rate hike to support dong

Vietnam’s central bank today (Sept. 23) surprisingly raised interest rates by as much as 1% to curb inflation and stabilize the dong, which fell to a record low this week.

The Central Bank of Vietnam raised the refinancing rate by 1% to 5% and the discount rate by 1% to 3.5%, effective today (September 23).

The Central Bank of Vietnam also increased interest rates on overnight loans between banks and interest rates on deposits in the dong currency.

“The central bank raises the policy rate to curb inflation and stabilize the dong. At the same time, it supports the economic recovery,” Vietnam’s central bank said.

Vietnamese Prime Minister Pham Minh Tinh urged the central bank to raise interest rates to support the dong after the dong fell for nine consecutive days yesterday (Sept. 22) to 23,712 dongs per dollar, the lowest level since 1993.

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