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Hanoi (VNA) - The Vietnam Asset Management Company (VAMC) has cut the applicable interest rates on euro and US dollar-denominated non-performing loans (NPLs) purchased from credit institutions.

Accordingly, the interest rate on euro-denominated NPLs has been reduced by 0.6 percent to reach 4.8 percent per year, while the rate for dollar – denominated NPLs has been cut by 0.1 percent to touch 4.2 percent per year.

However, the interest rate on Vietnamese dong-denominated NPLs remains unchanged at 9.6 percent.

The new interest rates are applicable in the first quarter of this year, from January 1 to March 31.

As per Circular 19, the State Bank of Vietnam requires VAMC to review and adjust the interest rates applicable on purchased NPLs in keeping with the repayment capacity of the borrowers, the interest rates prevalent in the market and based on the agreement with customers. These interest rates will be publicised by VAMC quarterly.

This is the seventh time VAMC has announced an adjustment in interest rates applicable to purchased NPLs. The company had adjusted interest rates for the first time during the second quarter of 2014, when it decided to significantly cut interest rates on NPLs bought in dong from 15 to 18 percent per year to just 10.7 percent per year.

VAMC General Director Nguyen Huu Thuy said the company acquired bad loans worth nearly 111 trillion VND (4.84 billion USD) at book value from credit institutions last year, in exchange for special bonds.

The VAMC has purchased bad debts worth 243 trillion VND (10.6 billion USD) since its launch in 2013.

Besides the NPL acquisition, VAMC and the credit institutions have so far together retrieved NPLs worth 22.783 trillion VND (994.8 million USD) by selling loans and secured assets.-VNA