Vietnam cuts rates to boost lending amid coronavirus carnage

The refinance rate has been cut from 6 percent to 5 percent and the discount rate from 4 percent to 3.5 percent, the State Bank of Vietnam (SBV) said in a statement.

It has lowered the cap for short-term loans by banks from 6 percent to 5.5 percent.

The central bank has also reduced the cap on interest rates on dong deposits of one to six months from 5 percent to 4.75 percent.

Credit growth in the first two months dropped to 0.06 percent, the lowest rate in six years, while GDP growth this year is forecast to hit a seven-year low of 5.96 percent.

The government has directed banks to cut interest rates and waive fees on VND250 trillion ($10.7 billion) worth of loans to stimulate borrowing.

It is also mulling giving affected businesses an extra five months to pay VND30 trillion ($1.3 billion) worth of taxes.

Many major economies have taken similar action. The U.S. has cut interest rates to 0-0.25 percent, and the U.K. to 0.25 percent.

Vietnam has recorded 61 coronavirus cases, including 18 foreigners, of whom 45 are in hospital. The remaining 16 recovered and were discharged.