Vietnam Central Bank to Hold Base Rate at 8% in September
The State Bank of Vietnam, the country’s central bank, said Wednesday it will keep the base interest rate unchanged at 8% per annum in September in order to stabilize the macro economy.
This is the 10th consecutive month the central bank has decided to maintain the rate steadily even though the country’s consumer price index (CPI) has been slowdown since May.
The refinancing and rediscount rates will remain at 8% and 6% per annum, respectively while the overnight rate on inter-bank market will be 8%, the central bank said on its website.
The SBV has so far been prudent in managing monetary policies, analysts said, adding that the central bank would not cut the benchmark rate for fear of inflation next month since it has devalued the dong by 2.1% to curb trade deficit.
But Le Xuan Nghia, vice chairman of Vietnam National Financial Supervision Committee, said at a recent seminar in Hanoi that inflation is well under control and the CPI will be less than 8% by the year-end versus .
As the central bank has not yet lower the base interest rate, local commercial banks will still apply high deposit interest rates of between 10.6% and 11.3% per annum, putting pressures on lending rates and resulting in a slow dong credit growth.
The lowest deposit interest rate is now at 10.6% per annum, offered by Trust Bank, while the normal lending rates remain high at above 14%.
Local banks have agreed to reduce interest rates to below 10% per annum on deposits and 12% on loans from October, in a move to help boost domestic production. (SBV)
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