Vietnam to keep key rates stable in H2-c.bank

HANOI, June 29 - Vietnam's central bank said it planned to keep key interest rates for the dong stable in the second half of 2009, after annual inflation this month sunk to its lowest level in more than five years.

"The base rate and other key rates will be kept at the current level," the central bank said in a report seen on Monday.

"In the remaining months the State Bank will continue to use monetary tools actively and flexibly but with caution in order to boost demand to curb economic slowdown and control inflation," it added.

The dong's base rate, used as a reference rate by commercial banks to set their lending rates, has been unchanged at 7 percent since February after the central bank cut it from 8.5 percent last December.

Other key rates including the refinancing rate and the discount rate have also been kept unchanged at 7 percent and 5 percent respectively since April 10.

Vietnam's economy, buffeted by the global recession, grew by an estimated 3.9 percent in the first half of 2009 from the same period last year, while June inflation dropped to 3.94 percent from a year earlier, the lowest level since January 2004. [ID:nHAN471752]

The National Assembly, or parliament, earlier this month approved the government's annual GDP growth target of "around 5 percent" and its goal to keep inflation below 10 percent this year.