JavaScript is off. Please enable to view full site.

Vietnam cuts rates to lift liquidity, support growth

Friday, September 13, 2019, 19:04 GMT+7
Vietnam cuts rates to lift liquidity, support growth
A Vietnamese flag flies atop the State Bank building in central Hanoi, Vietnam November 23, 2017. Photo: Reuters

Vietnam’s central bank said on Friday it is cutting several interest rates to increase liquidity and support economic growth, which the country hopes will stay near 7% this year.

The annual refinancing rate, rediscount rate, overnight electronic interbank rate, and rate for loans to offset capital shortage in clearance between the central bank and domestic banks, would each be cut by 0.25 percentage points from Sept. 16, the State Bank of Vietnam (SBV) said in a statement.

It said the rate cuts, the first since October 2017, would help increase liquidity for banks to provide credit, stabilise the economy and the foreign exchange market, and boost economic growth.

Vietnam has been one of the fastest growing developing nations.

For 2018, it reported growth of 7.08%, the fastest in 11 years.

It set a target of 6.6-6.8% for this year, and reported expansion of 6.71% in the first quarter and 6.82% for the second.

The government has said that the country should grow by at least 6.9% in the current quarter to ensure that the full-year target is achieved.

Helping lift Vietnam’s growth pace has been foreign investment, which economists say has increased this year, as some investors shift production from China because of the Sino-U.S. trade war.

“Rate cuts will help spur growth and boost exports especially in the background of the U.S.-China trade war now,” Hanoi-based banking analyst Nguyen Tri Hieu said.

“However, this move may cause the country’s inflation to increase.”

In August, Vietnam’s consumer price index increased 2.26% from a year earlier. The government aims to keep inflation below 4% this year.

According to the central bank, the refinancing rate will be reduced to 6.0% from 6.25%, the new rediscount rate will be cut to 4.25% and rate of loans to offset capital shortage in clearance between the central bank and domestic banks will be at 7.0%. 



Read more




Vietnamese youngster travels back in time with clay miniatures

Each work is a scene caught by Dung and kept in his memories through his journeys across Vietnam

Experience summer sand-boarding in Mui Ne

Sand-boarding, a popular activity amongst local children in the coastal tourism town of Mui Ne in south-central Vietnam, is attracting hundreds of tourists to the Red Sand Dunes

Young maple trees given better protection as Hanoi enters rainy season

The trees are currently growing well, with green leaves and healthy branches.

Hunting skinks for food in southern Vietnam

Skink meat is known to be soft, tasty, and highly nutritious.

Vietnamese-made app allows people to grow real veggies via smartphone

Nguyen Thi Duyen, a young engineer in Hanoi, developed the app and its related services to help busy people create their own veggie gardens.

Latest news