70th anniversary of Hanoi's Liberation Day Vietnam - Asia 2023 Smart City Summit Hanoi celebrates 15 years of administrative boundary adjustment 12th Vietnam-France decentrialized cooperation conference 31st Sea Games - Vietnam 2021 Covid-19 Pandemic
Home / Economy / Banking & Finance
Vietnam c.bank cuts policy rates again to buttress economic recovery
Ngoc Thuy 02:00, 2020/05/13
The cut is applied to the refinancing interest rate, discount interest rate, and overnight lending rate.

The State Bank of Vietnam (SBV), the country’s central bank, has announced its decision to further slash policy interest rates by 50 basis points in a move to support economic recovery.

 The State Bank of Vietnam. 

The SBV’s decision is in line with other major central banks around the world in face of the unfavorable global economic environment under the impact of the Covid-19 pandemic.

As per the decision, a 0.5 percentage point reduction would be applied to the refinancing interest rate, discount interest rate, overnight lending rate, and interest via open market operations (OMO). 

Accordingly, the refinancing interest rate is down from 5% per annum to 4.5%, rediscount rate from 3.5% to 3%, overnight interest rate from 6% to 5.5% and interest rate via OMO from 3.5% to 3%. 

The SBV also lowered the interest rate cap to 4.25% annually from 4.75% for deposits with maturities of one month to less than six months.

The deposit interest rate cap with maturities of less than one month is reduced from 0.5% to 0.2% per annum, while the maximum rate for deposit with maturities of one month to less than six months at people’s credit funds and micro finance services is cut from 5.25% to 4.75%.

Meanwhile, the SBV ordered banks to lower the maximum lending rate for short-term loans to 5% from 5.5%, with the aim of helping companies operating in the fields of agriculture, high-tech industries and exports, among others. Similarly, that rate at people’s credit funds and micro finance services is down from 6.5% to 6%.

The deposit rate for maturities of over six months is subject to each credit institution’s decision on the basis of supply – demand.

The cut is set to take effect on May 13.

The SBV on March 17 cut its policy rates by 50 – 100 basis points.

RELATED NEWS
TAG: Vietnam central bank policy rates interest rates covid-19 coronavirus nCoV pandemic
Other news
14:12, 2024/03/23
Finance ministry clears bottlenecks to pave way for stock market upgrade
One of the key measures is to allow securities companies with sufficient capacity to provide services without requiring foreign investors to have 100% of the funds before placing purchase orders for securities.
22:20, 2024/03/20
Over 60% of Vietnamese use QR codes to pay
Vietnam also leads Southeast Asia in terms of new e-wallet users.
20:39, 2024/03/18
Casinos contribute US$370 million to state budget over 5 years
The number of Vietnamese gamblers is falling.
08:22, 2024/03/13
Standard Chartered and IATA partner to launch IATA Pay in Vietnam
IATA Pay in Vietnam is powered by Standard Chartered’s Straight2Bank Pay.
17:50, 2024/03/07
Vietnam’s capital market shows positive signs: Finance Ministry
The government is planning to set up a capital trading platform for innovative start-ups.
14:29, 2024/03/06
Prime Minister urges banks to cut lending rates further
The Government leader has called for the publication of average lending rates to allow individuals and businesses to choose their banks.