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State Bank leaves prime rate at 7%   2009-08-04 - Viet Nam News

The prime rate will remain unchanged at 7% for this month.

 The prime rate will remain unchanged at 7 per cent for this month, the State Bank of Viet Nam said in a statement released yesterday, August 3.

The prime rate has remained unchanged since February, when the State Bank cut it from 8.25 per cent to 7 per cent - the lowest rate since 2004.

Pursuant to Decision No 1811/QD-NHNN, which took effect on August 1, the interest rate on dong-denominated loans would be capped at 10.5 per cent per year, although interest on consumer and some other loans could range between 12 and 16.5 per cent per year.

Banks lend nearly $22bil in subsidised loans

Over VND389.1 trillion (US$21.86 billion) was lent under the subsidised interest rate programme through July 30, according to the State Bank of Viet Nam. The amount was VND3.5 trillion ($196.6 million) higher than in the previous week.

Of the total, State-owned banks and credit unions lent VND272.3 trillion ($15.3 billion), private commercial banks VND93 trillion ($5.2 billion), and joint venture banks VND19.4 trillion ($1.08 billion). Finance companies lent only VND4.3 trillion ($241.6 million).

Domestic and foreign-invested private enterprises borrowed VND259.5 trillion ($14.6 billion) under the programme, State-owned enterprises VND61 trillion ($3.4 billion), and households VND68.6 trillion ($3.86 billion) under the programme.

In the past week, banks were quoting lending rates at 8.5-10 per cent on short-term loans in dong, 10-10.5 per cent on longer-term loans.

Credit institutions during the week of July 24-30 were reporting a rise in interbank rates by an average of 1.17 percentage points on one- to two-week loans, while interbank rates on six-month loans had fallen by a similar spread.

The average overnight rate was 6.92 per cent per year, an increase of 0.97 percentage points compared to the previous week.

Meanwhile, according to a State Bank weekly report, a number of commercial banks - including Orient Bank, Sacombank and Sai Gon-Ha Noi Bank-were offering higher interest rates on deposits, by 0.2-0.3 percentage points, in the week of July 24-30.

Currently the highest deposit interest rate on offer is 10.2 per cent, offered by both the Viet Nam Tin Nghia Bank and the Housing Development Bank on 36-month deposits.

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