Headquarters of the State Bank of Vietnam. (Photo: SBV)Hanoi (VNA) – The State Bank of Vietnam (SBV) willcut its policy rates starting from March 17 in an attempt to support the economy which has been hurtby the COVID-19 outbreak.
The central bank reduced the benchmark refinance rate to 5percent from 6 percent and the discount rate to 3.4 percent from 4 percent, itsaid in a statement released on March 16.
The overnight lending rate in the inter-bank market waslowered to 6 percent from 7 percent and the open-market-operation (OMO) rate, to 3.5 percent from 4 percent.
The bank also reduced the caps on the interest rate ofVietnamese Dong-denominated deposits and loans by 0.25 – 0.5 percentage points,depending on the maturities.
The COVID-19 pandemic is evolving complicatedly, leavingnegative impact on the global economy, it said, citing the fact that to preventrecession, many foreign governments have adopted economic stimulus policies,one of which is policy rate cuts made by central banks. For example, the USFederal Reserve has slashed its interest rates to 0 – 0.25 percent to improvethe market’s liquidity.
In a meeting last week, SBV Deputy Governor Dao Minh Tu saidthe reduction of the benchmark interest rate is a solution to help creditinstitutions with abundant liquidity, thus putting them in a better position tosupport affected businesses.
The central bank made the last interest rate cut by 0.25percentage point in September last year./.
VNA
