Emerging Asia Economics Update
Vietnam rate hikes inevitable and should be aggressive
Vietnam’s central bank today confirmed that its key base rate will be left unchanged for the rest of 2009. But rate hikes look necessary from early 2010 and the policy tightening next year is likely to be the most aggressive in Asia. We are forecasting 500bps of rate hikes by end 2010 to ensure that Vietnam does not suffer another overheating crisis.
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