Central bank cuts regulatory interest rates

This will be the forth time the interest rates have been cut this year.

Under the bank’s Decision No. 1123/QD-NHNN issued on June 16, the overnight lending rate in interbank electronic payments and loans to cover capital shortfalls in clearing payments of the SBV for credit institutions will be slashed from current 5.5 percent per annum to 5 percent.

The refinancing interest rate will be lowered to 4.5 percent from the current 5 percent.

Meanwhile, the rediscount interest rate will decrease from  3.5 percent to 3 percent. 

The same day, the central bank also issued Decision No. 1124/QD-NHNN on the maximum lending interest rate in VND of credit institutions.

Accordingly, the maximum rate for non-term and term deposits of less than one month remains unchanged at 0.5 per cent per annum.

The maximum for deposits with terms from one month to less than six months will be cut from 5 percent per annum to 4.75 percent.

However, the maximum interest rate in VND deposits at the People’s Credit Fund and microfinance institutions will be lowered from 5.5 percent to 5.25 percent per annum.  

The move was made following the decision of the Government on managing monetary policy and banking operations in a flexible, proactive, tight, and reasonable manner in harmony with fiscal policies and macro-economic policies, to curb inflation, stabilize the macro-economy and the monetary market, and reduce market interest rates for businesses and individuals, contributing to economic recovery.

Earlier,the SBV continued reducing regulatory interest rates, effective from May 25./.