Commercial banks have begun to cut lending interest rates amid signs of improvement in the economy.
Agribank on Tuesday announced a cut of 1-1.5 percent in lending rates offered to borrowers across-the-board, establishing rates of between 15.5 percent and 20 percent per year.
This followed moves by the Bank for Investment and Development of Vietnam (BIDV), Vietinbank and Vietcombank, which have all reduced interest rates this month on loans in dong, with commercial lending rates now ranging from 14.5 percent to 17 percent per year.
Asia Commercial Bank has also launched a preferential lending programme to exporters with interest rates lowered by 0.5 percent from normal levels.
"I believe the general level of lending rates will gradually decline in the short term," said Agribank Chairman Nguyen Ngoc Bao, noting that the four banks having already lowered rates represented a combined 55-60 percent share of the domestic credit market.
He added that the banks were all ranked in "Group 1" – which industry insiders use to refer to the healthiest, safest and most stable credit institutions.
Tai Hui, a researcher at Standard Chartered Bank, said inflationary pressures have begun to ease and inflation could fall to one-digit levels by the end of the second quarter. He said much will depend much on the stability of global fuel prices and domestic electricity costs, as well as the strength of the dong.
Bao said he also expects deposit interest rates to fall in the coming months, noting that banks need to cut costs and absorb losses before lending rates could fall.
Agribank will concentrate on recovering bad debts among property and consumer borrowers and retain its focus on lending to agricultural and rural borrowers.-VNA
Agribank on Tuesday announced a cut of 1-1.5 percent in lending rates offered to borrowers across-the-board, establishing rates of between 15.5 percent and 20 percent per year.
This followed moves by the Bank for Investment and Development of Vietnam (BIDV), Vietinbank and Vietcombank, which have all reduced interest rates this month on loans in dong, with commercial lending rates now ranging from 14.5 percent to 17 percent per year.
Asia Commercial Bank has also launched a preferential lending programme to exporters with interest rates lowered by 0.5 percent from normal levels.
"I believe the general level of lending rates will gradually decline in the short term," said Agribank Chairman Nguyen Ngoc Bao, noting that the four banks having already lowered rates represented a combined 55-60 percent share of the domestic credit market.
He added that the banks were all ranked in "Group 1" – which industry insiders use to refer to the healthiest, safest and most stable credit institutions.
Tai Hui, a researcher at Standard Chartered Bank, said inflationary pressures have begun to ease and inflation could fall to one-digit levels by the end of the second quarter. He said much will depend much on the stability of global fuel prices and domestic electricity costs, as well as the strength of the dong.
Bao said he also expects deposit interest rates to fall in the coming months, noting that banks need to cut costs and absorb losses before lending rates could fall.
Agribank will concentrate on recovering bad debts among property and consumer borrowers and retain its focus on lending to agricultural and rural borrowers.-VNA
