Operating interest rates continue to decrease by another 0.5%/year

Accordingly, the State Bank issued Decision No. 950 on refinancing interest rates, rediscount interest rates, overnight lending interest rates in interbank electronic payments and loans to cover capital shortages in clearing payments of the State Bank for credit institutions (CIs). Specifically, the overnight lending interest rates in interbank electronic payments and loans to cover capital shortages in clearing payments of the State Bank for CIs are reduced from 6%/year to 5.5%/year; the refinancing interest rate is reduced from 5.5%/year to 5%/year; the rediscount interest rate remains at 3.5%/year.

Operating interest rates continue to decrease

Decision No. 951 reduces the interest rate on deposits with terms from 1 month to less than 6 months from 5.5%/year to 5%/year, while the maximum interest rate on deposits in VND at People's Credit Funds and Microfinance Institutions is reduced from 6%/year to 5.5%/year. The maximum interest rate applied to non-term deposits and deposits with terms of less than 1 month remains at 0.5%/year; the maximum interest rate applied to deposits. The interest rate on deposits with terms of 6 months or more is determined by credit institutions based on the supply and demand of capital in the market. The new interest rate will take effect from May 25.

After the State Bank of Vietnam reduced the operating interest rate twice, commercial banks have massively reduced deposit interest rates in the market. Recently, 4 state-owned commercial banks reduced deposit interest rates by 0.3%/year for some terms. The highest deposit interest rate is 7.2%/year for terms of 12 months or more; under 12 months, the deposit interest rate is from 4.5 - 5.8%/year. Joint stock commercial banks also continuously adjusted the deposit interest rate in the residential sector but with higher interest rates. For terms of less than 6 months, the interest rate hit the ceiling of 5.5%/year, but from 6 months or more, it increased to 7 - 8%/year depending on the bank. The rate of reduction in deposit interest rates of banks compared to the beginning of the year is about 1 - 2%/year, but loan interest rates only decreased by about 0.5 - 1%/year. The common interest rate of banks is 9 - 10%/year, however there are loans up to 13 - 15%/year.

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