The State Bank of Vietnam (SBV) has announced two decisions to further reduce policy interest rates, effective from May 25, 2023.
The first decision, No. 950/QD-NHNN, stipulates the interest rates of refinancing, rediscount, overnight interbank electronic payment, and compensatory lending for the capital shortfall in offset payments by the SBV to credit institutions (CIs).
Under this decision, the interest rates of the overnight interbank electronic payment and compensatory lending for the capital shortfall in offset payments by the SBV to CIs will be reduced from 6.0% per annum to 5.5% per annum.
The refinancing interest rate will be lowered from 5.5% per annum to 5.0% per annum, while the rediscount interest rate remains unchanged at 3.5% per annum.
The second decision, No. 951/QD-NHNN, stipulates the maximum interest rates of Vietnamese dong (VND) deposits of organizations and individuals at credit institutions, as specified in Circular No. 07/2014/TT-NHNN dated March 17, 2014.
According to the decision, the maximum interest rate of non-term and term deposits of less than one month remains unchanged at 0.5% per annum. The maximum interest rate of deposits with terms from one month to less than six months will be reduced from 5.5% per annum to 5.0% per annum.
However, the maximum interest rate of VND deposits at the People’s Credit Fund and microfinance institutions will be lowered from 6.0% per annum to 5.5% per annum. The interest rate of deposits with terms of six months or longer will be determined by the CIs based on the market supply and demand for capital.
The central bank’s decision to further cut the policy interest rates aims to stimulate economic growth, support liquidity in the interbank market, and provide favorable conditions for borrowing and lending activities within the banking system.
These measures are expected to encourage investment and consumption, contributing to the overall stability and development of the Vietnamese economy.
The SBV reassures the public and the banking sector that it will continue to closely monitor market developments and adopt appropriate monetary policies to maintain macroeconomic stability and ensure the efficient functioning of the financial system.