The central bank of Vietnam (SBV) yesterday, as expected, announced that its key policy rate will stay unchanged at 8.0% during June. Nevertheless, the cash rate looks too low for an economy that will probably expand at a 7.0-7.5% pace in the second half of 2010 and where annual inflation is likely to stay in the 9-10% range. We continue to expect that rates will move up in coming months: our best guess is from the start of July once Q2 GDP data have been published, and by another 100bp.