Vietnam central bank plans cutting policy rates to support growth

The State Bank of Vietnam, on Tuesday, said it would cut policy rates by 100 basis points from Wednesday to address the liquidity problem for households and businesses.

The bank will cut the discount rate to 3.5 per cent from 4.5 per cent.

It will cut the interbank overnight lending rate to six per cent from seven per cent.

The refinancing rate will be kept unchanged at six per cent, the central bank said in a statement posted on its website.

The Apex Bank will also cap bank dong loan rates at five per cent, down from 5.5 per cent.

The move is part of the government’s effort to “disentangle difficulties that have arisen in the economy, cutting lending rates for businesses and households”, the central bank said.

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It cut the last rates in 2020 to support the economy through the COVID-19 pandemic.

Last year, as Vietnam experienced upward pressure on inflation and downward pressure on currency.

The Apex Bank raised policy rates in September and widened the exchange rate trading band in October.

Vietnam will try to keep its economic growth at 6.5 per cent this year.

Public investment, foreign direct investment, exports and domestic consumption will back the growth.

The government is striving for the targeted 4.5 per cent for the year. (Xinhua)