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State Bank slashes key interbank interest rates   2012-04-11 - VNS

The State Bank of Viet Nam (SBV) yesterday cut the deposit interest rates by 1 per cent for one-month and longer-term deposits, bringing the rate down to 12 per cent per annum effective from today.

However, under Circular 08/2012/TT-NHNN issued by the central bank, the Credit People's Fund could offer a 12.5 per cent rate per year.

Interest on non-term deposits in Vietnamese dong will fall to 4 per cent from the existing 5 per cent.

Deposit interest rates for Vietnamese dong deposited before today in commercial banks, including foreign banks, will still be allowed to enjoy the previous rate of 13 per cent.

On the same day, SBV Governor Nguyen Van Binh also signed Decision 693/QD-NHNN regarding re-financing, discounts and overnight interest rates on the inter-bank market.

The re-financing interest rate has been set at 13 per cent per year, the discount interest rate at 11 per cent and overnight interest at 14 per cent.

At the end of last week, Vietinbank lowered its annual lending interest rate from 15 per cent to 14 per cent.

The new rate will apply to the export, agricultural and rural development sectors, as well as support industries and small- and medium-sized enterprises.

An interest rate of 12 per cent per year will also be applied to traders wishing to purchase rice from the 2011-12 winter-spring harvest to hold in reserve, Vietinbank said.

Meanwhile, the Cuu Long (Mekong) Delta Housing Development Bank said it had earmarked reserves of VND3 trillion (US$142 million) to lend to domestic producers at 1 per cent to 2 per cent below its annual market rate.

Eximbank has also set aside VND1 trillion ($44 million) for preferential loans over a six-month period for family-run businesses that had been in operation for at least three years.

This will be the third reduction in lending interest rates by domestic banks since March 12 to help firms more easily access credit.

A meeting between the SBV and 12 major commercial banks (G12) in Ha Noi last week heard that the lending proportion out of total deposits in the first two months of the year reduced to 96.4 per cent from 116 per cent in the fourth quarter last year, which indicated improved liquidity.

However, commercial banks said they were unable to lend more due to a cap on their credit growth.

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