The State Bank of Vietnam (SBV) has just announced two decisions on interest rate management, effective from May 25, 2023. This is the third time the SBV has decided to reduce operating interest rates to support the economy since the beginning of 2023.
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| The State Bank continues to lower operating interest rates for the third time. |
Specifically, Decision No. 950/QD-NHNN dated May 23, 2023 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 of Vietnam for credit institutions. Accordingly, the overnight lending interest rates in interbank electronic payments and loans to cover capital shortages in clearing payments of the State Bank of Vietnam for credit institutions are reduced from 6.0%/year to 5.5%/year; the refinancing interest rate is reduced from 5.5%/year to 5.0%/year; the rediscount interest rate remains at 3.5%/year.
Next is Decision No. 951/QD-NHNN dated May 23, 2023 on maximum interest rates for deposits in Vietnamese Dong of organizations and individuals at credit institutions as prescribed in Circular No. 07/2014/TT-NHNN dated March 17, 2014.
Accordingly, 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 with terms from 1 month to less than 6 months decreases from 5.5%/year to 5.0%/year, while the maximum interest rate for deposits in Vietnamese Dong at People's Credit Funds and Microfinance Institutions decreases from 6.0%/year to 5.5%/year; the interest rate for deposits with terms of 6 months or more is determined by credit institutions based on the supply and demand of capital in the market.
According to experts, the measure to lower operating interest rates aims to help banks reduce deposit interest rates, thereby creating conditions to lower lending interest rates, support the economy, and promote rapid growth.
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