[Vnbiz] interest rate hike in July?

[Charles Vo]

Considering the government has been talking tough about inflation and a stable dong to fidgety foreign investors, I think there has to be another rate hike in the works at the July meeting.  Banks have raised interest rates to around 18% per annum for dong deposits, but I think it has not been enough to really attract interest from the hardcore dollar bulls in Vietnam.  Another 2% hike will also allow banks to have more breathing room between the lending and deposit rates.  Thailand had to jack up interest rates to stabilize the baht.  Paul Volker jacked up interest rates to kill inflation. The Taiwanese investors, the main skeptics of the dong, have to be convinced.