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Oct 28 (Reuters) - Vietnam is lowering the ceiling on dollar and dong deposits, a move that the market has expected and which could reduce loan rates and boost economic growth.
The Southeast Asian nation expects economic growth of 6.2 percent in 2015, faster than the targeted 5.8 percent the government says is attainable this year.
Strong exports and a booming manufacturing sector are driving Vietnam's economy, which independent economists have said remains constrained by structural woes such as a wasteful state sector, high levels of bad debts and subdued domestic spending.
On Tuesday, the State Bank of Vietnam said that effective from Wednesday banks can offer a maximum interest of 5.5 percent to dong deposits with terms from one month to less than six months, compared with 6 percent now.
The ceiling on dollar deposits by individuals will be lowered to 0.75 percent from 1.0 percent now, the statement said.
The ceiling on short-term dong loans extended to several sectors such as agriculture, exports and supporting industries will be lowered by one percentage point to 7 percent, the central bank said.
A central bank official said early this year that it would abolish the ceiling on deposit rates altogether if the banking sector has ample liquidity and the macro-economy is stable.
After growing 5.42 percent in 2013, the economy has been expanding faster. In July-September, annual growth quickened to 6.19 percent from 5.42 percent in the second quarter and 5.09 percent in the first three months.
As of Oct. 24, loans were 7.85 percent higher than at the end of 2013. The SBV expects an annual increase of 12 percent for the full year, the bottom end of a 12-14 percent target forecast by the governor in late September.
Bad debt in the banking sector eased to 3.88 percent of loans at the end of September, according to a central bank official, down from 4.11 percent at the end of July. (Reporting by Mai Nguyen; Writing by Ho Binh Minh; Editing by Richard Borsuk)
original source: http://www.reuters.com/article/2014/10/28/vietnam-economy-rates-idUSL4N0SN3EN20141028