Vietnam's central bank urges further lending rate cuts
Vietnam's banking sector has reduced deposit interest rates by 1-1.2 percentage points and loan interest rates by 0.5-0.65 percentage points in the first four months of this year, but further cuts are needed.
Dao Minh Tu, Deputy Governor of the State Bank of Vietnam (SBV), made the statement at the government's monthly press meeting on Friday.
He elaborated these cuts, including one in the first quarter and another in April, are part of the central bank's policy to aid businesses in line with its flexible monetary policy to tame inflation, stabilize the currency, and harmonize exchange and interest rates.
The central bank has urged banks to further cut interest rates in order to facilitate access to loans and boost credit growth, Tu added.
As a result of the interest rate reduction, average deposit interest rates are now 6-6.1%, while loan interest rates stand at 9-9.2%, according to Tu.
"Notably, state-controlled commercial banks have slashed interest rates by 1-1.5 percentage points for deposits and 1.5-2 percentage points for loans on average, the SBV leader said.
Vietcombank, one of the "Big 4", cut loan interest rates by 0.5 percentage points on May 1 until the end of July. Agribank has cut lending rates by 1-1.5 percentage points for packages of VND100 trillion ($4.26 billion) and $500 million from mid-March to end-June.
In February, MBBank announced a promotion of 1 percentage point cut for loan interest rates aimed at businesses with annual revenues below VND100 billion ($4.26 million).
Also at the press meeting, SBV Governor Nguyen Thi Hong said that by April 25, credit growth had reached only 2.75% compared to the end of last year.
The low capital absorption rate was due to low demand for capital from businesses given shrinking orders. Other firms had demand for loans but their poor health after the pandemic made them fail to meet lending conditions. Credit for the real estate sector only grew 3.51% due to legal barriers facing their projects.
Regarding the exchange rate and foreign currency market, Hong highlighted the SBV has purchased $6 billion in the year to date to pump money into the economy, resulting in a stable exchange rate.
To boost economic growth, Hong suggested the country should enhance domestic demand as Vietnam's GDP largely depends on exports while foreign market demand is unlikely to improve anytime soon as a result of continuing tightened global monetary policies.
Another recommendation was that credit growth, a driving force behind the economy, should be harmonious with the target of ensuring safety of the banking system, amid the collapse of some banks in the U.S.
She noted the collapse of Silicon Valley Bank and First Republic Bank was due to their investments in long-term assets that lost value amid higher interest rates.
"The lesson for Vietnam is that the economic growth should not over-rely on credit growth, especially long-term credit. Economic expansion should also be based on public investments and other sources," Hong added.
- Read More
Former Government Office chairman receives $7,900 bribe from property project
Mai Tien Dung, former Minister-Government Office Chairman, received a bribe worth VND200 million ($7,900) from Nguyen Cao Tri, owner of the Dai Ninh eco-resort and urban area project in Lam Dong province.
Society - Sat, November 2, 2024 | 9:13 pm GMT+7
Thai food giant CP enters public-private partnership to promote food system transformation
Thai-invested C.P. Vietnam Livestock JSC and the Partnership for Sustainable Agriculture Vietnam (PSAV) signed a memorandum of understanding Friday on working together to advance sustainable agriculture in the country.
Companies - Sat, November 2, 2024 | 7:16 pm GMT+7
Central Vietnam province Quang Ngai to begin work on new VSIP industrial park next year
Vietnam’s central province of Quang Ngai will work with the investor to have construction of VSIP II Quang Ngai, a facility based on the Vietnam-Singapore Industrial Park (VSIP) model, begin in August 2025.
Industrial real estate - Sat, November 2, 2024 | 3:47 pm GMT+7
Vietnam likely to grow 6.5% in 2024-2025: VinaCapital
VinaCapital, among the biggest foreign-run asset managers in Vietnam, has forecast the country’s economy to achieve 6.5% growth in both 2024 and 2025, with the composition of the expansion to change to more domestically driven factors next year.
Economy - Sat, November 2, 2024 | 2:00 pm GMT+7
Major Vietnamese developer Novaland appoints new CEO
Duong Van Bac, who joined Novaland as chief financial officer in August 2023, has been appointed general director, starting Friday.
Companies - Sat, November 2, 2024 | 10:24 am GMT+7
Vietnamese conglomerate Bamboo Capital posts 36-fold profit growth in Q3
Ho Chi Minh City-based Bamboo Capital Group recorded an after-tax profit of VND331.2 billion ($13.1 million) in the third quarter of 2024, an astounding 36-fold expansion year-on-year.
Southeast Asia - Sat, November 2, 2024 | 9:41 am GMT+7
ThaiBev to bag $54 mln from Sabeco’s upcoming dividend payout
Vietnam Beverage, wholly owned by Thai Beverage (ThaiBev) will rake in VND1,374 billion ($54.26 million) worth of dividend from Ho Chi Minh City-based top brewer Sabeco.
Companies - Sat, November 2, 2024 | 9:13 am GMT+7
Steel heavyweight Hoa Phat pours over $2 bln into central Vietnam complex
Leading Vietnamese steelmaker Hoa Phat had invested more than VND52.5 trillion ($2.08 billion) in its Dung Quat Iron and Steel Integrated Complex (Dung Quat 2) in the central province of Quang Ngai as of Q3/2024.
Industries - Sat, November 2, 2024 | 8:00 am GMT+7
Vietnam becomes Australia’s fastest-growing inbound market
The number of Vietnamese tourists to Australia has grown significantly after the Covid-19 pandemic, with nearly 178,000 reported in the 12 months to August 2024, according to a Friday press release by the Australian Minister for Trade and Tourism’s Office.
Southeast Asia - Fri, November 1, 2024 | 10:02 pm GMT+7
Study finds shift in Thai consumers’ spending patterns
Consumers in Thailand are shifting their spending focus to experiences and investments, according to the latest ASEAN Consumer Sentiment Study (ACSS) by United Overseas Bank (UOB).
Southeast Asia - Fri, November 1, 2024 | 10:00 pm GMT+7
Energy security, digitalization key to Indonesia's economic growth
The Indonesian government is prioritizing long-term economic growth through energy security, digitalization, and natural resource industrialization, according to Deputy Minister of Finance Thomas Djiwandono.
Southeast Asia - Fri, November 1, 2024 | 9:58 pm GMT+7
Vietnam PM's Middle East tour creates breakthroughs in economic, trade, investment cooperation: FM
Prime Minister Pham Minh Chinh’s freshly ended six-day trip to the UAE, Saudi Arabia and Qatar has produced important outcomes, demonstrating the growing relations between Vietnam and the three Middle-East countries, Deputy Prime Minister and Foreign Minister Bui Thanh Son told the Vietnam News Agency.
Politics - Fri, November 1, 2024 | 9:25 pm GMT+7
Vietnam, Qatar look to tap potential for energy, oil & gas collaboration
Vietnam and Qatar have recognized the significant potential for further collaboration in multiple sectors such as energy, oil and gas, especially LNG, agriculture, Halal industry, and banking.
Politics - Fri, November 1, 2024 | 9:02 pm GMT+7
Thailand bans export of raw palm oil until December
Thailand's Department of Internal Trade has temporarily banned the export of raw palm oil due to reduced production caused by drought and plant diseases.
Southeast Asia - Fri, November 1, 2024 | 8:31 pm GMT+7
Envision Energy to build $420 mln wind power plant in Vietnam from June 2025
Envision Energy Singapore Pte Ltd, under China-based Envision Energy, aims to kick off construction of the 300-MW Envision Nam Po wind power plant in Vietnam’s northern mountainous province of Dien Bien in June 2025.
Energy - Fri, November 1, 2024 | 8:30 pm GMT+7
Indonesia to ban plastic waste imports from 2025
The Indonesian government will start imposing a ban on the import of plastic waste from the beginning of next year, according to Minister of Environment Hanif Faisol Nurrofiq.
Southeast Asia - Fri, November 1, 2024 | 8:29 pm GMT+7
- Consulting
-
Remove roadblocks to lure foreign investment into Vietnam: HSBC exec
-
Rethinking resilience: How typhoon Yagi redefines supply chain strategies in northern Vietnam
-
In trade and investment, ASEAN and China are better together
-
AI can be a game changer for Vietnam tourism
-
Investment opportunities in LNG-to-power projects in Vietnam
-
Pepper prices 2024: will the dream of 'black gold' repeat?