Operating interest rate continues to decrease by another 0.5%/year

Accordingly, the State Bank of Vietnam issued Decision No. 950 on refinancing interest rates, rediscount interest rates, overnight lending rates in interbank electronic payments and loans to cover capital shortages in clearing payments of the State Bank of Vietnam for credit institutions. Specifically, 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%/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 demand 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 its operating interest rates twice, commercial banks have massively reduced their deposit interest rates in the market. Recently, four state-owned commercial banks have reduced their deposit interest rates by 0.3% per year for some terms. The highest deposit interest rate is 7.2% per year for terms of 12 months or more; under 12 months, the deposit interest rate is 4.5 - 5.8% per year. Joint stock commercial banks have also continuously adjusted their savings interest rates in the residential sector but have higher interest rates. For terms of less than 6 months, the interest rate hits the ceiling of 5.5% per year, but for terms of 6 months or more, it increases to 7 - 8% per 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% per year, but the loan interest rate has only decreased by about 0.5 - 1% per year. The common interest rate of banks is 9 - 10%/year, however there are loans up to 13 - 15%/year.

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