The State Bank late last week cut
down its base and benchmark interest rates, allowing commercial banks to
further slash lending rates this week.
Accordingly, the State Bank
reduced the refinancing interest rate to 9 per cent from 10 per cent per annum,
the overnight rate in the inter-bank electronic payment to 10 per cent from 11
per cent per year and the discount interest rate to 7 per cent from 8 per cent
per year.
The maximum VND mobilising
interest rate remains at 2 per cent per year for deposits of less than one
month. The rate for one to below 12-month deposits was adjusted down to 8 per
cent from 9 per cent per year. The rate for 12-month and beyond deposits will
be set by market demand and supply.
The State Bank stipulated the
maximum VND short-term lending rate of 12 per cent instead of 13 per cent per
year to be charged by credit institutions and foreign bank branches. This rate
is applied for borrowers of prioritized sectors including agricultural and
rural areas, exports, supporting industries, small and medium enterprises, and
hi-tech businesses. The State Bank’s move came as the inflation growth has
slowed down, expected at around 7 per cent this year.
Earlier, anticipating that the
State Bank would soon reduce key interest rates, many banks had already cut
down their rates for more than one-year term deposits.
All large banks like Vietcombank,
Vietinbank, BIDV, ACB, Eximbank and Sacombank, and smaller banks like GPBank,
Bac A Bank, TienPhong Bank and Saigonbank last week adjusted their rates down
by 0.5-1 per cent.
Many bankers and observers
already forecast a reduction in interest rate previously as the liquidity of
banking system, subject to high year-end withdrawal demand Tet spending, had
remained stable.
The State Bank also kept pumping
and attracting capital through open market operation (OMO) to support liquidity
for banking system.
Based on a report released last
week by Bao Viet Securities Company, during December 10-14, total capital
outflow through OMO was VND2,090 billion ($100 million), with the net outflow
of VND115 billion ($5.5 million), down VND221 billion ($10.6 million) compared
to previous week, with mainly short term transactions.
“We believe that the liquidity of
banking system in general was still stable. Currently, the interbank interest
bank rate is trending upward, but this will happen for short term only as there
are few banks facing liquidity issue at year end,” the report stated.
According to Nguyen Xuan Thanh,
director of the Public Policy Programme at the Fulbright Economics Teaching
Programme, based on the macroeconomic condition with the expected inflation of
5-6 per cent, the base rate can be even down to 7 per cent.
Le Xuan Nghia, former vice
chairman of the National Financial Supervisory Committee, said December would
be the critical time to reduce interest rate, as it would have huge impact on
business for 2013 by stimulating consumption demand, encouraging investment and
influencing business planning for 2013.
Trinh Trang | vir.com.vn
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