SBV tells banks to further cut lending interest rates

By Anh Minh May 5, 2023 | 05:54 pm PT

Dao Minh Tu, deputy governor of the State Bank of Vietnam, speaks at a regular government press conference on May 5, 2023. Photo by Khanh Nguyen

The State Bank of Vietnam is urging banks to further reduce loan interest rates in the coming months, said its deputy governors Dao Minh Tu.

At its urging, banks had recently cut both deposit and lending interest rates, he said at a regular government press conference on Friday, pointing out that the latter had decreased by 0.5-0.65 percentage points in late April

"The central bank is continuing to instruct banks to cut interest rates, creating conditions for enterprises to borrow, and expand credit from now to the end of this year."

Deposit interest rates have declined by 1-1.2 percentage points since the end of last year.

State-owned banks have lowered deposit and lending interest rates by 1-1.5 percentage points and 1.5-2 percentage points.

According to a report by the Ministry of Planning and Investment, the average loan interest rate currently stands at 9.56%, 0.41 percentage points lower than at the end of 2022.

High interest rates have become a burden amid the market difficulties, weak demand for goods and services and declining orders.

The central bank cut policy rates by 0.3-1 percentage point between March and April.

On April 25, Prime Minister Pham Minh Chinh chaired a meeting with executives from state-owned banks to discuss lending interest rate cuts and resolving difficulties faced by the corporate bond market and real estate projects.