Central bank cuts rates yet again

By Dat Nguyen September 30, 2020 | 07:02 pm PT

An employee counts Vietnamese banknotes at a bank in Hanoi. Photo by VnExpress/Giang Huy.

The State Bank of Vietnam has cut its policy rates for a fourth time this year as it seeks to pump-prime the economy amid the Covid-19 pandemic.

It cut the refinancing rate from 4.5 percent to 4 percent and the discount rate from 3 percent to 2.5 percent. It also lowered caps on the interest banks pay on dong deposits from 4.25 percent to 4 percent for periods of one to six months.

For longer maturities, banks are allowed to decide their own rates depending on the market. Major banks are keeping the rate at 6 percent for 12-month deposits.

The central bank reduced the overnight electronic interbank rate from 5.5 to 5 percent. The previous rate cuts were in March, May and August.

This year the country recorded the lowest first nine-month growth rate in a decade of 2.12 percent.

The government said earlier last month it expected economic growth of 2-2.5 percent for this year. Last year it had topped 7 percent.