The annual interest rate cap for short-term Vietnamese dong deposits will be cut from 6 percent to 5.5 percent.
The State Bank of Vietnam (SBV) made this announcement at its regular monthly meeting in Hanoi on October 28 and added that the decision, the second of its kind this year in support of business, will take effect on October 29.
The annual interest rate cap for US dollar deposits of one to six months will likewise be slashed from 1 percent to 0.75 percent.
The interest rate cap for short-term dong loans granted to the five top-priority sectors of agricultural and rural development, exports, support industries, small – and medium-sized companies and high-technology enterprises, will be reduced from 8 percent to 7 percent.
People's credit funds and micro-finance organisation will be allowed to apply an interest rate cap of 8 percent.
The SBV also decided to maintain the policy rates for refinancing, discount and overnight loans. Accordingly, the refinancing rate remains at 6.5 percent while the discount rate stands at 4.5 percent and the overnight rate, 7.5 percent.
At the meeting, the SBV reported that as of October 24, the total number of deposits increased by 11.88 percent, of which dong deposits accounted for 13.17 percent.
Credit growth increased by 7.85 percent compared to that of last December, largely because of the Government's top-priority industries. The SBV this year targets a credit growth of 12 to 14 percent.
After the SBV's interest rate cut of 0.5 percentage points last March, deposit and lending rates declined by one to 1.5 percent against that of last December.
As of October 9, dong loans with interest rates of more than 15 percent represented 4.12 percent of total outstanding loans, against 6.3 percent last December. Loans with rates of more than 13 percent accounted for 11.7 percent of total outstanding loans, in comparison with 19.72 percent last December.
SBV Deputy Governor Nguyen Thi Hong said bad debts were gradually reduced in the past four months, from 4.17 percent in late June to 4.11 percent in late July, 3.9 percent in late August and 3.88 percent in late September.
She added that to reduce bad debts to 3 percent by 2015, as targeted by the Government, the SBV has instructed commercial banks to enhance their risk provisions and use the fund for this purpose to reduce existing and new bad debts.
Nguyen Quoc Hung, Chairman of the Vietnam Asset Management Company, revealed that his company has so far bought 95 trillion VND (4.46 billion USD) in bad debts while selling 3.5 trillion VND (164.319 million USD) in bad debts, thereby exceeding the annual target of 2.5 trillion VND (117.37 million USD).-VNA
The State Bank of Vietnam (SBV) made this announcement at its regular monthly meeting in Hanoi on October 28 and added that the decision, the second of its kind this year in support of business, will take effect on October 29.
The annual interest rate cap for US dollar deposits of one to six months will likewise be slashed from 1 percent to 0.75 percent.
The interest rate cap for short-term dong loans granted to the five top-priority sectors of agricultural and rural development, exports, support industries, small – and medium-sized companies and high-technology enterprises, will be reduced from 8 percent to 7 percent.
People's credit funds and micro-finance organisation will be allowed to apply an interest rate cap of 8 percent.
The SBV also decided to maintain the policy rates for refinancing, discount and overnight loans. Accordingly, the refinancing rate remains at 6.5 percent while the discount rate stands at 4.5 percent and the overnight rate, 7.5 percent.
At the meeting, the SBV reported that as of October 24, the total number of deposits increased by 11.88 percent, of which dong deposits accounted for 13.17 percent.
Credit growth increased by 7.85 percent compared to that of last December, largely because of the Government's top-priority industries. The SBV this year targets a credit growth of 12 to 14 percent.
After the SBV's interest rate cut of 0.5 percentage points last March, deposit and lending rates declined by one to 1.5 percent against that of last December.
As of October 9, dong loans with interest rates of more than 15 percent represented 4.12 percent of total outstanding loans, against 6.3 percent last December. Loans with rates of more than 13 percent accounted for 11.7 percent of total outstanding loans, in comparison with 19.72 percent last December.
SBV Deputy Governor Nguyen Thi Hong said bad debts were gradually reduced in the past four months, from 4.17 percent in late June to 4.11 percent in late July, 3.9 percent in late August and 3.88 percent in late September.
She added that to reduce bad debts to 3 percent by 2015, as targeted by the Government, the SBV has instructed commercial banks to enhance their risk provisions and use the fund for this purpose to reduce existing and new bad debts.
Nguyen Quoc Hung, Chairman of the Vietnam Asset Management Company, revealed that his company has so far bought 95 trillion VND (4.46 billion USD) in bad debts while selling 3.5 trillion VND (164.319 million USD) in bad debts, thereby exceeding the annual target of 2.5 trillion VND (117.37 million USD).-VNA
