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SBV slashes ceiling interest rates by 1%   2012-05-26 - VNA

The ceiling interest rate for deposits in dong with terms of one month up will be cut from 12 to 11 per cent per year from next Monday, under a State Bank of Viet Nam's decision issued yesterday.

The ceiling lending interest rate will be correlatively slashed from 15 to 14 per cent per year on the same day, applied to four prioritised sectors including export, agriculture, rural areas and small- and medium-sized enterprises.

Interest rates used as management tools to be adjusted down include the refinancing rate from 13 to 12 per cent, the discount rate from 11 to 10 per cent, and the inter-bank electronic payment rate from 14 to 13 per cent.

The State Bank said the interest rate reduction aimed to help solve difficulties for production and business activities in accordance with the Government direction.

It said economic improvement, especially easing inflationary pressure, facilitated the move. The consumer price index (CPI) edging up 0.18 per cent in May and increasing 2.87 per cent in the first five months of this year was suitable to the target the National Assembly had set out for this year, it said.

Assured bank liquidity and a stabilising monetary market were also advantages, it added.

The central bank noted that although interest rates had gradually declined, their slow progress together with rising credit risks still significantly challenged businesses in the face of falling purchasing power and increasing inventories.

Before yesterday's move, interest rates had been slashed three times this year.

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