SBV interest rate cuts to allay economic difficulties

Illustrative image (Photo: VNA)

Hanoi (VNA) - Interest rate cuts by the State Bank of Vietnam (SBV) and cost savings among credit institutions will pave the way for sustainable lending rate reductions, thus easing difficulties faced by businesses.

Head of the SBV’s Monetary Policy Department Pham Thanh Ha said the latest interest rate adjustment is in compliance with the Prime Minister’s Directive No. 11/CT-TTg dated March 4 and Decision No. 15/2020/QD-TTg dated April 24, as well as Government Resolution No. 41/NQ-CP dated April 9.

He said the SBV advocates ensuring liquidity for credit institutions and reducing interest rates after considering macro-economic factors, inflation targets, and the operating safety of credit institutions.

The central bank will continue to closely monitor domestic and foreign market developments to actively and flexibly adjust monetary policies, thus controlling inflation and propelling economic growth.

On May 12, the SBV decided to cut lending and discount rates, with annual refinancing rates coming down from 5 percent to 4.5 percent and discount rates from 3.5 percent to 3 percent.

Ceiling rates on deposits of one to six months fell to 4.25 percent per annum from 4.75 percent, while rates for non-term deposits and those below one month fell from 0.5 percent to 0.2 percent.

Short-term lending rates for five priority business sectors went down from 5.5 percent to 5 percent per annum./.