SBV Cuts Ceiling Interest Rates by 1 Pct

The ceiling interest rate for deposits in the Vietnamese dong with terms of one month up will be cut from 12 percent to 11 percent per year from next Monday, under a State Bank of Vietnam's decision.

 

The ceiling lending interest rate will be correlatively slashed from 15 percent to 14 percent per year on the same day, applied to four prioritised sectors including export, agriculture, rural areas and small- and medium-sized enterprises.

 

Interest rates used as management tools to be adjusted down include the refinancing rate from 13 percent to 12 percent, the discount rate from 11 percent to 10 percent, and the inter-bank electronic payment rate from 14 percent to 13 percent.

 

The State Bank said the interest rate reduction aimed to help solve difficulties for production and business activities in accordance with the Government direction.

 

It said economic improvement, especially easing inflationary pressure, facilitated the move. The consumer price index (CPI) edging up 0.18 percent in May and increasing 2.87 percent in the first five months of this year was suitable to the target the National Assembly had set out for this year, it said.

 

Assured bank liquidity and a stabilising monetary market were also advantages, it added.

 

The central bank noted that although interest rates had gradually declined, their slow progress together with rising credit risks still significantly challenged businesses in the face of falling purchasing power and increasing inventories.

 

Before yesterday's move, interest rates had been slashed three times this year.