Lending interest rates have decreased by nearly 1% since the beginning of the year.

The State Bank said the average lending interest rate is currently at 8.3% per year, down 0.96% compared to the end of 2023.

Reporting to the Prime Minister at the meeting on the afternoon of August 5, the State Bank said that since the beginning of the year, this agency has had solutions to facilitate businesses and people to access bank credit, restore production and business, control inflation, and ensure the safe operation of the credit system.

Interest rates on loans and savings continued to decline, according to the report. By the end of June, the average lending rate was 8.3% per year, down 0.96% from the end of 2023. The average deposit rate was 3.59% per year, down 1.08%.

Credit growth across the system recovered from the end of March, gradually increasing over the months, higher than the growth rate in the same period last year, reaching 6% by the end of the second quarter. At the end of July, outstanding credit was nearly VND 14.33 trillion, up 14.99% over the same period in 2023 and up 5.66% over the end of last year.

Transaction at a bank branch in Ho Chi Minh City, November 2023. Photo: Thanh Tung

In fact, since the beginning of the year, the Government has repeatedly requested the State Bank to find solutions to reduce lending interest rates in the context that the production and business sectors are still facing difficulties due to reduced orders, weak demand, and high lending interest rates.

At today’s meeting, Prime Minister Pham Minh Chinh said that monetary policy has contributed to the socio-economic development goals in the first months of the year. However, according to him, interest rates are still on the rise, credit growth has not met requirements, and demand for loans will increase at the end of the year.

The Prime Minister assigned the banking sector to achieve credit growth of about 15% this year, focusing on lending to sectors that are growth drivers for the economy. For credit institutions that do not use up their allocated quota, the Prime Minister requested additional capital for other banks with growth potential.

The agency must also continue to direct and encourage banks to reduce costs, apply information technology, and digital transformation to reduce lending rates. The Prime Minister noted that state-owned commercial banks must take the lead in doing this.

According to him, the amount of money that people deposit in banks is currently over 15 million billion VND. The State Bank must have solutions to effectively serve this capital source for production and business. This agency must also flexibly manage exchange rates, control the gold and foreign currency markets, and handle bad debts.

With the 120,000 billion VND preferential credit package for social housing development, the State Bank proposed to increase it to 140,000 billion VND with a longer loan term and lower interest rates. The Prime Minister requested the banking management agency to study appropriate access conditions and find ways to make this credit package work because this is a humane policy, helping the needy have a place to live.

In addition to credit, as of July 31, the central exchange rate was at 24,255 VND per USD, up 1.63% compared to the end of 2023. This is a low and stable average compared to currencies in the region and around the world, according to the State Bank.

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