Vietnam central bank cuts interest rates to support economic growth

The State Bank of Vietnam announced to cut deposit interest rates for organizations, individuals, and foreign bank’s branches as well as lending interest rates of credit institutions for some economic sectors.

Accordingly, the maximum annual deposit interest rate for below one-month term will be reduced to 0.8% from 1%. Annual interest rate for one-month term to below six-month term will be cut to 5% from 5.5%.

Meanwhile, maximum short-term lending interest rate for capital to be injected in agriculture, rural areas, exports, supporting industries, small and medium-sized enterprises, and high-tech enterprises will be reduced to 6% from 6.5%.

Short-term lending interest rate for microfinance institutions will be lowered to 7% from 7.5% per year.

The Government has policy to reduce interest rates to support economic development, foreign exchange markets. The move was prompted by recent unfavorable global economic developments, said the central bank.

The U.S.-China trade war is weighing on global growth and hurting prospects for export-reliant nations like Vietnam.

Previously, on September 16, 2019, the central bank simultaneously reduced rates. It also cut the treasury bill interest rates three times since the beginning of 2019.