On June 19, the State Bank of Vietnam officially reduced a series of operating interest rates.

DNHN - According to the State Bank of Vietnam (SBV), the continued reduction in operating interest rates confirms and establishes a trend of interest rate reduction for the market in the coming time, thereby directing credit institutions to be more daring

Specifically, the interest rate for overnight loans in interbank electronic payments and loans to cover capital shortfalls in clearing payments of the State Bank for credit institutions fell from 5.5%/year to 5%/year; the refinancing interest rate fell from 5%/year to 4.5%/year; and the rediscount interest rate fell from 3.5%/year to 3%/year.

According to Circular No. 07/2014/TT-NHNN dated March 17, 2014, the State Bank also reduces the maximum interest rate on Vietnam Dong (VND) deposits held by organizations and individuals at credit institutions.

The maximum interest rate applicable to deposits with a term from 1 month to less than 6 months will be reduced from 5.0%/year to 4.75%/year, with the maximum interest rate for deposits in VND at the Fund people's credit, microfinance institutions reduced from 5.5%/year to 5.25%/year.

/TT-NHNN December 30, 2016. Simultaneously, the State Bank lowered the maximum short-term lending interest rate in VND of credit institutions for borrowers to meet the capital needs of several economic sectors and industries, by Circular No. 39/2016.

.0%/year; Particularly, the maximum short-term lending interest rate in VND for these capital needs will be reduced from 5.5%/year to 5.0%/year at People's Credit Funds and microfinance institutions.

This is the fourth consecutive reduction in interest rates by the State Bank in less than three months. Before this, the SBV reduced some types of operating interest rates to support the economy in mid-March, early April, and late May, for a total reduction of 0.5-2.0%/year in operating interest rates.

The decision to reduce the operating interest rate of the State Bank was made after the Government Standing Committee requested the agency to urgently and synchronously and effectively implement the tools of the monetary policy; urgently take practical and specific solutions to reduce interest rates; in which reducing the operating interest rate in June 2023 and orienting to reduce the deposit and lending interest rates for customers of credit institutions to acclimatize to the new moneta business, growth promotion; effectively overcoming the low credit growth of the previous five months.

The State Bank stated, about the aforementioned action, that continuing to reduce the operating interest rates is a solution that is adaptable to the current market conditions and will help achieve the goal of reducing lending rates to support the lending process. The economic growth recovery process is by National Assembly policy, Government directive, and the Prime Minister's direction. Consequently, the State Bank continues to focus on reducing the market lending interest rate, thereby removing obstacles for businesses, individuals, and the economy.

In addition, the adjustment of the maximum interest rate on deposits in VND for terms ranging from one to six months helps credit institutions reduce input costs, thereby creating favorable conditions to continue lowering lending rates to support credit institutions. Help customers reduce their expenses. This time, the State Bank of Vietnam's decision to reduce the maximum interest rate on short-term loans in VND from credit institutions creates favorable conditions for businesses and individuals to access low-cost loans to support production and business in a variety of fields. By government policy, economic growth is propelled by the government's priority areas and key areas.

The continued reduction of the operating interest rate by the State Bank of Vietnam confirms and establishes a trend of interest rate reduction for the market shortly, thereby orienting credit institutions to be bolder and more decisive in reducing lending rates, along with businesses and individuals, contributing to economic growth and recovery.

PV (Synthesis)