In the context of less favourable world economy, many central banks of countries including the US Federal Reserve (FED), the European Central Bank (ECB) have reduced regulating interest rates, The State Bank of Vietnam (SBV) has also decided to lower the rate.
SBV has just issued Decision No. 1870/ QD-NHNN dated September 12, 2019 on the interest of refinance, rediscount, overnight in inter-bank e-payment and loans to offset the capital shortage in clearing payment of SBV with banks.
Accordingly, reducing the refinancing interest rate from 6.25 percent to 6.0 percent per year; rediscount rate from 4.25 percent to 4.0 percent per year; overnight lending rate in inter-bank e-payment and lending to offset the capital shortage in the clearing payment of SBV for banks from 7.25 percent to 7.0 percent per year. Along with that, the interest rate of buying valuable papers through the open market operation (OMO) from 4.75 percent to 4.5 percent per year.
The decision takes effect from September 16, 2019.
According to the explanation of SBV, in the previous period, in the context of rising international interest rates, the agency had coordinated monetary policy solutions to stabilise interest rates, contributing to the stability of macroeconomic policy and support reasonable growth.
However, in the recent period, the world economy has become less favourable, many central banks including the US Federal Reserve (FED) and the European Central Bank (ECB) have reduce operating rates; plus the domestic macro-economy continued to be stable, inflation was under control, the monetary and foreign exchange markets were stable, so SBV decided to reduce the operating interest rate.
Earlier, in July 2017, SBV Governor Le Minh Hung decided to reduce the operating interest rate. Specifically, a reduction of 0.25 percent per year of the operating rates including refinancing rate, rediscount interest rate, overnight lending interest rate in inter-bank electronic payment and shortage-compensating lending capital in SBV clearing for banks.
At the same time, SBV also decided to reduce 0.5 percent per year of the maximum short-term lending interest rate in dong of credit institutions to borrowers to meet the capital needs to serve some economic fields and sectors.
Immediately after the direction of the Governor, the lending interest rates at credit institutions have simultaneously decreased. The common lending rate for priority fields is 6-6.5 percent per year for short-term, state-owned commercial banks apply common interest rates for medium and long-term loans with priority fields at 9-10 percent per year. Lending rates for normal business sectors are 6.8-9 percent per year for short term; 9.3-11 percent per year for the medium and long term. For good customer groups with healthy financial situation and transparency, short-term loan interest rates are from 4-5 percent per year.
