Vietnam Interest Rate 2007-2011

CFVG MBA-20
Business Economics

Nguyen Viet Dung

VIETNAM INTEREST RATE 2007-2011: A ROLLER COASTER RIDE

I. INTRODUCTION
During 2007 2011, Vietnams relate identify fluctuated greatly. In 2007, intimacy rates were unchangeable at 8.25%, 6.5%, 4.5%, 11.4% for basic interest rate, refinancing rate, discount rate, and short-term l residuum rate respectively; then they surged to their highest at 14%, 15%, 13%, 21% at the end of the second seat of 2008. Then suddenly they started to drop as low as 7%, 7%, 5%, 6.3% by July 2009, then from in that respect they rebounded and has continued to increase, reaching 9%, 13%, 15%, 20% as of today (which is comparable to their highest in 2008). This fluctuation is show in the graph below:

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This paper summaries the trend of interest rates for each year from 2007 to 2011 as well as attempts to explain why interest rates have fluctuated in such manner for each period. In addition, this paper in any case attempts to identify two important causes that contributed to the fluctuation of interest rates during this period. The first cause which started the fluctuation in interest rate is the sudden surge in FDI starting from the end of 2006 to the end of 2008.



The second cause which creates fluctuation after fluctuation of interest rate is the stop-go and inconsistence macro policies of Vietnam government.

II/ FLUCTUATION OF INTEREST rate FOR EACH PERIOD FROM 2007 TO 2011
A. 2007: Accelerating before the ride
The good ending of 2006 did have a good beginning for 2007 with high expectation receivable to the following reasons:
Vietnam Communist Party 10th Conference obdurate that the main focus for the 2006-2010 Socio-Economic Plan is economic growth.
High agency level among policy makers, local businesses, foreign investors in the prospect of Vietnam economy after the success of WTO and APEC in 2006.
Therefore, governments main anteriority in economic policy for 2007 is to focus on growth. In prepare to achieved this,...If you want to get a full essay, order it on our website: Orderessay



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