State bank Average deposit interest rate is decreasing to 6-6.1%year

DNHN - The State Bank of Vietnam has decided to reduce the operating interest rate, thereby encouraging commercial banks to reduce deposit and lending interest rates.

During the regular Government press conference held on the afternoon of 5 May, Deputy Governor of the State Bank (SBV) Dao Minh Tu stated that in the first four months of the year, the State Bank is considering reducing the operating interest rate as a means to reduce interest rates.

Based on an analysis of the domestic and global economic situation, the State Bank has decided to reduce the operating interest rate, providing commercial banks with guidelines for reducing deposit and lending rates.

"Specifically, the general deposit interest rate of all credit institutions in the economy fell by approximately 1% to 2%, while banks’ general lending interest rate fell by approximately 0.5 to 0.65%. Mr. Tu stated that state-owned commercial banks reduce deposit interest rates by 1% to 1.5% and lending rates by 1.5-2%.

According to the Deputy Governor, the average annual interest rate on new deposits is currently between 6% and 6.1%. New loan interest rates are approximately 9-9.2% per annum.

Specifically, State Bank leaders stated that several high-lending banks have been reminded, directed, and deemed to have a unified ground within the system. Mr. Tu stated, "Of course, it is not equal, but it must be consistent and adhere to the financial level of credit institutions when establishing their interest rates."

From now until the end of the year, the SBV will continue to direct banks to reduce interest rates, create conditions for businesses to access capital, and expand credit.

According to experts, the objective of lowering operating interest rates is to permit banks to reduce deposit rates, thereby creating the conditions for lowering lending rates and bolstering economic growth.

According to the head of the Monetary Policy Department (SBV), this is an appropriate move by the State Bank because major central banks around the world, including the Federal Reserve (Fed) in the United States, have eased their tightening policies. In the future, currency, which reduces the momentum of interest rate hikes, may even reduce interest rates. This justifies the State Bank's consideration of continuing to reduce operating interest rates and the maximum deposit interest rate, thereby creating favorable conditions for reducing lending rates to support the recovery and expansion of the economy.

PV (t/h)