Commercial banks to continue loan rate cuts: central bank

Vietnamese banks have reduced loan interest rates by 1.5-2 percentage points from end-2022, exceeding the initially-expected decrease of 1.5 percentage points, and the trend is likely to continue.

State Bank of Vietnam Deputy Governor Dao Minh Tu made the statement at a Wednesday meeting between the government and businesspeople on the occasion of the Vietnamese Entrepreneurs' Day (October 13).

Banks will continue cutting loan interest rates as a delayed impact of the central bank’s fourth rate cut in June, he added.

The central bank (SBV) will continue to manage the monetary policy in a flexible manner, aiming to facilitate a favorable and stable market for businesses and trading activities, and ensure that inflation remains below 4.5%, Tu said.

Such policies also aim to help the economy absorb abundant capital and overcome challenges arising from the global economic slowdown, the deputy governor elaborated.

He also noted other efforts including providing more credit for prioritized sectors, easing loan conditions, implementing special credit programs for some sectors and cooperating with local authorities to solve issues faced by businesses.

Credit growth reached 7% in the year through September 29, slower than 11.05% in the same period of 2022, according to Tu. Outstanding loans reached VND13,000 trillion ($532 billion), while VND600 trillion ($24.55 billion) has been pumped to aid the ailing corporate bond market, he added.

Starting Wednesday, Agribank, VietinBank, and BIDV, three state-controlled banks of the “Big 4” group, reduced their interest rates for 12-month deposit terms and longer to 5.3%. This is the same rate that Vietcombank, the other one in the “Big 4” group, applied a week ago. As a result, all “Big 4” banks in Vietnam have cut their deposit interest rates to 5.3% or below, a record low in recent years.

Data from 33 banks show that the highest deposit interest rates for 12-month terms are given by GPBank with 6.55%, BaoViet Bank with 6.3%, NCB with 6.3%, and CBBBank with 6.2%.