12:40:38 PM | 4/9/2008
A number of major banks such as Vietcombank, BIDV, Agribank and Techcombank will cut lending interest rates in Sept after the State Bank of Vietnam, the country’s central bank, has announced that it will triple interest rate on bank reserves to 3.6% from Sept 1 this year.
The Bank for Foreign Trade of Vietnam, or Vietcombank said that it will cut 0.5%-1% of lending rates per annum to 20%.
The Bank for Investment and Development of Vietnam and the Bank for Agriculture and Rural Development of Vietnam (Agribank), the country’s largest lender, will lower dong-lending rates to 20% per annum for ordinary clients and 18%-19% for their prioritized borrowers.
BIDV will also cut 0.5%-1% of dollar-lending rate to 6.5%-7.5% per annum.
The Vietnam Technological & Commercial Joint Stock Bank (Techcombank) will slash 0.5%-1% of lending rate of dong loans. Meanwhile, Nguyen Thanh Toai, vice general director of ACB said that the bank will consider cutting lending rates to below 21% per annum.
“Banks cut lending rates this time will help reduce borrowing costs of local businesses and boost the country’s GDP growth rate,” Pham Quang Thang, vice CEO of Techcombank said.
At the same time, small and medium banks will unlikely further cut lending rates because they have to raise funds from local people with high deposit rates of more than 18.5%.
Le Xuan Nghia, a leading economist, head of the SBV’s Banking Development Strategy said the central bank’s move will partially help boost liquidity of commercial banks which will cut 0.5%-1% of lending rates.
Mr Nghia also estimated that compulsory reserves kept at credit organizations and banks at VND170 trillion (US$10.3 billion).
Tran Hoang Ngan, member of the National Financial and Monetary Policy Consultancy Council forecast that CPI will soar only 1%-2% in Sept, so SBV may lower base rates to 12%-13% from current 14%.
Vietnam’s economy is really short of cash in circulation and for payment, Ms Ngan recently said.
Nguyen Thanh Ha, head of the Saigon Securities Incorporation’s Research and Strategy Department Monday proposed loosening a little bit the monetary policy by cutting lending rate to 18%-19.5% to boost production and economic growth.
Vietnam has so far cut VND29 trillion of public investment projects, accounting for 5% of the total to curb inflation that is forecast to be 27%-28% by the end of the year, Ha said. (Labor, Securities Investment)
Vietnamese
