After a meeting with the State Bank on May 25, commercial banks agreed to reduce lending interest rates by 0.3-05% for all existing customers, effective from May 29. This is considered an appropriate step by the banking industry to reduce interest rates, creating conditions for people and businesses to access capital.
Previously, the State Bank decided to lower the operating interest rate for the third time this year and reduce the ceiling interest rate for deposits with terms of less than 6 months to 5%/year. The State Bank also regularly directs commercial banks to minimize costs to stabilize interest rates to support people and businesses in difficult circumstances.
Following the direction of the State Bank, a number of commercial banks have proactively reduced interest rates for old loans. Specifically, Vietcombank has reduced interest rates twice for existing loans, applied from the beginning of the year to the end of July 2023. Agribank reduced interest rates by 0.5% for medium and long-term loans from May 15 to September 30 this year. In the private commercial bank sector, ACB reduced from 0.5-2% for old customers whose loans are due for interest rate changes. In addition, many commercial banks have launched many low-interest credit packages with accompanying promotions and incentives. These moves have contributed to reducing the average lending rate in the market to 9.3%/year, down 0.65% compared to the beginning of 2022 (data announced by the State Bank).
However, according to economic experts, currently, reducing interest rates is only a necessary condition but not enough to promote credit growth, contributing to the recovery of production and business. The evidence is that after many interest rate cuts by the banking industry, the national credit growth rate as of May 16 increased by only 2.72%, much lower than the same period in 2022. In Phu Yen, the situation is no exception when by the end of April, credit in the province increased by only 1.25% compared to the beginning of the year, the lowest in the past 5 years.
Experts say that production and consumption are two important sectors of the economy but are facing a serious decline. Many individual customers and businesses do not need to borrow money to spend more or expand production and business. Therefore, at present, in addition to the efforts of the banking sector to reduce interest rates, ministries and sectors need to soon have positive solutions to restore production, business, consumption, and promote the demand for loans of people and businesses... That is the sufficient condition to stimulate credit growth, contributing to economic recovery.
LE HAO
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