Commercial Banks Cut Rate Following Vietnam Central Bank Move

Several commercial banks in Vietnam have already decided to cut lending rates in response to the central bank’s announcement of a 1.5 percentage point reduction in benchmark interest rate.

 

The Bank for Foreign Trade of Vietnam (Vietcombank), the country’s third largest bank by assets, December 21 announced its new lending interest rates, effective from today, will fall by 1.48 percentage points to 11 per cent per annum.

 

Sacombank will offer special lending interest rates of 10 per cent to 10.5 per cent per year from today to its traditional businesses, bank general director Tran Xuan Huy said.

 

The HCM City-based lender, which is the only listed bank on the HOSE, also cut interest rates of one-month term deposits by 0.7 percentage point to 7.8 per cent a year and three-month term by 1.28 per cent percentage point to 8.22 per cent a year.

 

Many commercial banks said they were cutting the U.S. dollar deposit interest rates to 3 per cent a year because demand for the greenback has been low.

 

The State Bank of Vietnam issued a decision on lowering its benchmark interest rate to 8.5 per cent from 10 per cent, effective today, to help business overcome the tough economic climate.

 

The rate cut will help lower borrowing costs for both companies and individuals and help stimulate production and consumption, analysts said, adding that local banks will be forced to lower their lending rates to 12.8 per cent, sharply down from 15 per cent before the reduction. (People)