The changes take effect on February 1, the State Bank of Vietnam said. The lower reserve requirements, the first sign of monetary easing this year by Vietnam's central bank, means banks will have more dollars to put into circulation since they will have to park smaller amounts in accounts at the central bank.
"This move means the dollar is becoming cheaper," a dealer at a foreign bank in Hanoi said. "It appears that with this move, the central bank may want to shift credit growth into dollars." The central bank has projected credit growth in 2010 of 25 percent, after lending accelerated at an annual rate of 37.73 percent last year versus 23.6 percent the previous year.
The lower reserve requirement would help address a shortage of dollars in the system, after the government ordered seven corporations to sell dollars to banks to help ease the shortage. That followed a devaluation of the dong in November. Dollar supply could be boosted if the government successfully sells a 10-year sovereign bond worth $1 billion, with roadshows scheduled this week in Hong Kong, London, Boston and New York.