Vietnam Central Bank to Cut Benchmark Interest Rate to 7.5 per cent This Week: Official
The State Bank of Vietnam, the country’s central bank, could cut the benchmark interest rate to 7.5 per cent within this week in order to stir up the national economy, a reliable official of the SBV who asked not to be named said.
“The reserve rate could be cut by 1 per cent,” the official said, noting the prime rate will fall to 7.5 per cent, which will bring the maximum lending rate to just 11.25 per cent per annum, the Vietnam Investment Review said.
“This cut will not affect local lenders too much because they are turning their back on loans,” Nguyen Thanh Toai, deputy general director of the Asia Commercial Bank said.
“The slowdown in economic growth is really weighing on enterprises, and no company is borrowing for fun,” Toan noted.
Meanwhile, Nguyen Dai Lai, the SBV’s Credit Information Center’s deputy general director said further loosening monetary policy will create better access to bank loans for businesses coupled with the government’s stimulus packages.
By cutting reserve requirement by 1 per cent to 4 per cent, the SBV will pump an additional VND17 trillion to VND20 trillion into the banking system, the newspaper said.
Hoang Diem Thuy, Vietcombank’s Domestic Treasury Department’s head said the base rate cut will push down lending rates to 8 per cent-9 per cent per annum.
“With VND17 trillion (US$1 billion) stimulus package provided to banks at a zero interest rate, a lending rate of 4 per cent-5 per cent is still profitable for lenders,” Thuy said. (VIR)
Vietnamese
