On March 31, 2023, the State Bank of Vietnam (SBV) has issued Decisions reducing the key interest rates, which take effect on April 3, 2023. This is the second time the SBV has cut down the key interest rates in March, 2023 in order to continue to implement the policy of the National Assembly, the Government and the Prime Minister on removing the difficulties for the economy, reducing the lending interest rates for the businesses and the people.
Having followed closely the Resolutions of the National Assembly and the directions of the Government and the Prime Minister, the SBV has managed the monetary policy and the banking operations in a proactive, flexible and effective manner, in close coordination with the fiscal policy and other macro policies in order to contribute to controlling the inflation, maintaining the macro-economic stability, stabilizing the money market, and making efforts to reduce the lending interest rates in support of the economic recovery.
Over the past time, the global economic outlook has undergone some uncertainties, the inflation rates in many countries have remained at high levels; the domestic economic growth has faced with various difficulties; the growth rate in the first Quarter of 2023 was lower than those of the same previous periods. On the positive side, the domestic inflation has been controlled; the liquidity of the credit institutions and the foreign bank branches are abundant, meeting the payment demand of the economy. Moreover, the credit institutions have managed to cut down on their costs and reduce the common mobilizing interest rates.
In order to further implement the policy of the National Assembly, the Government and the Prime Minister on removing the difficulties for the economy, reducing the lending interest rates for the businesses and the people, the SBV has decided to adjust the key interest rates, with the adjustments taking effect on April 3, 2023, specifically as follows:
1. Decision No. 574/QD-NHNN dated March 31, 2023 on the refinancing interest rate, the rediscounting interest rate, the overnight rate for the inter-bank electronic payments, and the interest rate applied to loans to finance short-term balances in the clearing transactions between the SBV and the credit institutions. Accordingly, the refinancing rate is lowered from 6% p.a. to 5.5% p.a.; the rediscounting rate is maintained at 3.5% p.a.; the overnight rate for the inter-bank electronic payments and the rate applied to loans to finance short-term balances in the clearing transactions between the SBV and the credit institutions is maintained at 6.0% p.a.
2. Decision No. 575/QD-NHNN dated March 31, 2023 on the interest rate caps for the mobilization in VND, which are applied to organizations’ and individuals’ deposits at the credit institutions and the foreign bank branches as stipulated in Circular No. 07/2014/TT-NHNN dated March 17, 2014. Accordingly, the maximum VND mobilization interest rate for demand and below 1-month terms is declined from 1% p.a. to 0.5% p.a.; the maximum VND mobilization interest rate for time deposits of 1-month to below 6–month terms decreases from 6.0% p.a. to 5.5% p.a.; the maximum VND mobilization interest rate for short-term loans in VND applied to the People’s Credit Funds and the Micro Finance Institutions is cut down from 6.5% p.a. to 6.0% p.a.; the interest rates for time deposits of 6-month plus terms will be determined by each credit institution on the basis of the market capital supply and demand.
3. Decision No. 576/QD-NHNN dated March 31, 2023 on the interest rate cap applied to the VND short-term loans provided by the credit institutions and the foreign bank branches to borrowers to meet the capital demand in a number of priority sectors and areas in line with Circular No. 39/2016/TT-NHNN dated December 30, 2016. Accordingly, the interest rate cap is reduced from 5.0% p.a. to 4.5% p.a.; the interest rate cap applied to the VND short-term loans in the priority sectors and areas provided by the People’s Credit Funds and the Micro Finance Institutions is lowered from 6.0% p.a. to 5.5% p.a.
4. Decision No. 577/QD-NHNN dated March 31, 2023 on the interest rates applied to the deposits of the State Treasury and the Deposit Insurance of Vietnam at the SBV. Accordingly, the interest rate applied to deposits in VND of the State Treasury and Deposit Insurance of Vietnam is lowered from 0.8% p.a. to 0.5% p.a.; the interest rate applied to deposits in foreign currencies of the State Treasury is maintained at 0% p.a.
5. Decision No. 578/QD-NHNN dated March 31, 2023 on the interest rates applied to the deposits of Vietnam Development Bank, Vietnam Bank for Social Policies, the people’s credit funds and the micro-finance institutions at the SBV. Accordingly, the interest rate applied to the deposits of Vietnam Development Bank, Vietnam Bank for Social Policies, the people’s credit funds and the micro-finance institutions is cut down from the current 0.8% p.a. to 0.5% p.a.
Le Hang