Commercial banks have pledged to cut the loan interest rates by 0.2-2.5 percentage points in the second half of the year, says Vietnam's central bank.
The extent of reduction would differ for customers and sectors, the State Bank of Vietnam (SBV) informed voters in the central province of Thanh Hoa in a public meeting prior to the 15th National Assembly’s fifth session.
In order to help small- and medium-sized enterprises (SME), the SBV will deploy special credit programs for some sectors, with preferential policies related to interest rates, collateral, and specific debt handling mechanisms.
It will also guide credit institutions to cooperate with local funds to provide more loans to SMEs.
The banking sector is offering preferential credit terms for SMEs, via commercial banks, the Vietnam Bank for Social Policies and banks guaranteed by local non-for-profit funds for SMEs, the voters were told.
As of end-June, outstanding loans of businesses accounted for 51% of the total figure for the economy, the SBV noted. Of which, the amount for SMEs reached VND2,300 trillion ($95.43 billion), up 3.5% from end-2022, and accounting for 18.4%.
In June, the SBV cut its refinance and discount rates by 50 basis points to spur the country’s growth as it faced prolonged global economic headwinds. The refinance rate was cut to 4.5%, the discount rate to 3%, and the overnight electronic interbank rate to 5%. It was the central bank’s fourth policy rate adjustment this year.
In July, SBV Deputy Governor Dao Minh Tu said that with suitable conditions, the SBV may continue cutting interest rates. The central bank was encouraging commercial banks to reduce fees and other costs to decrease their interest rates in order to help businesses, Tu said.
In August, the SBV asked banks to further lower lending rates by 1.5-2 percentage points per annum to better support the country’s economic growth. Such rate cuts should be for both outstanding and new loans, the central bank said, stressing that Prime Minister Pham Minh Chinh has repeatedly required that lending rates go down to support both businesses and residents.
In late August, the 12-month deposit interest rates at major banks in Vietnam, domestic and foreign, fell below 6%.
State-controlled Vietcombank, BIDV, VietinBank and Agribank, also known as the “Big 4” banks accounting for more than half the credit in the economy, reduced their 12-month deposit rates from 6.3% to 5.8%, starting August 23.