Central bank cuts rates for first time in two years

9:53:47 AM | 3/16/2023

The State Bank of Viet Nam (SBV) has announced that several rates will be reduced from March 15 to increase liquidity and support economic growth.

The State Bank of Vietnam (SBV) issued two decisions to decrease regulatory interest rates by 0.5% to 1% from March 15, 2023 - Illustration photo

Specifically, the annual rediscount rate shall be lowered to 3.5 percent from 4.5 percent while the annual interest rate for loans to offset capital shortages in clearance between the central bank and domestic banks shall be revised down to 6 percent from 7 percent.

The annual refinancing shall remain unchanged at 6 percent, the central bank said in its statement on Tuesday.

The central bank also announced that the maximum short-term lending interest rate in the Vietnamese dong of credit institutions for borrowers to meet capital needs for economic sectors and industries shall be reduced to 5 percent from 5.5 percent per year, starting March 15.

The maximum short-term lending interest rate in the Vietnamese dong of people's credit funds and microfinance institutions shall be decreased from 6.5 percent per year to 6 percent per year.

In early March 2023, commercial banks in Viet Nam agreed to reduce deposit interest rates by 0.2-0.5 percent for loans with a term of 6-12 months following a meeting with the State Bank of Viet Nam.

Source: VGP