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Vietnam Money Supply
The increase in prices and wages, as well as a mismanaged
devaluation of the dong in the early 1980s, contributed to
increases in the demand for credit and in the actual amount of
currency in circulation. Domestic credit subsequently increased
to reflect the large price adjustments that were made, the
increase in inventories, and the emergence of bank-financed
budget deficits. Credit to the commercial sector accounted for
nearly half the total outstanding capital-credit. The expansion
of domestic credit was reflected in a proportional expansion in
liquidity. Total deposits rose significantly, and the volume of
cash in circulation increased. Interest rates were adjusted
accordingly in order to restrain growth in credit and the amount
of cash in circulation. The rate on savings deposits was raised,
and lending rates were lowered to reflect higher deposit rates.
Data as of December 1987
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