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Vietnam raises key interest rate to 14 percent

Vietnam raises key interest rate to 14 percent

Vietnam increased the benchmark interest rate for a third time this year to rein in the fastest inflation since at least 1992 and shore up confidence in the currency and stock markets.
The State Bank of Vietnam raised the base rate t0o 14 percent from 12 percent to stabilize the economy, according to a statement on the central bank's Web site.
The Southeast Asian nation also increased the refinancing rate to 15 percent from 13 percent and the discount rate to 13 percent from 11 percent. The new rates are effective from tomorrow.
Vietnam last week cut its growth target for this year and said it needed to prioritize getting inflation under control. Consumer prices surged 25.2 percent from a year earlier in May.
Fitch and Standard & Poor's cut their outlook on Vietnam's foreign-currency credit rating to negative from stable in May, and said the country's banking system may be at risk.