The Hanoitimes – In 2018, inflation is estimated at 4% year-on-year, the highest level since 2014. Due to external and internal risks, including tightening of monetary policies and trade tension in the global economy and higher inflation of the local economy, interest rates in Vietnam are expected to rise in 2019, according to Viet Dragon Securities Corporation (VDSC). On the front of external risks, tightening of monetary policies is directly leading to rising global borrowing costs after a long period of favorable global financing conditions, stated VDSC in its latest report. In the US, there are likely two more interest rate hikes in the latter part of 2018 as inflation is close to the FED target. The FED’s objective is 3.5% for the benchmark rate by the end of 2019. The European Central Bank (ECB) will close its asset purchase program by 2018 while the Bank of Japan (BOJ) is likely to reset its inflation and monetary policy targets. In addition to the US Dollar appreciation, oil price hikes as well as trade tension risks, the pressure on rising borrowing cost is spreading out and threatening the financial stability as well as credit quality in many countries. High foreign currency denominated debt countries are vulnerable to global tightening monetary policies. Various countries have started to raise their benchmark interest rates to fight against inflation and investment outflows. In Asia, India lifted its interest rate for the second straight time in 2018. In ASEAN, four big-GDP countries, including Singapore, Indonesia, Malaysia… [Read full story]
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