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Basic interest rate of 12 percent/year to be applied as of May 19
This is specified in the State Bank of Vietnam (SBV)’s Decision No 1099, which was officially announced by SBV Governor Nguyen Van Giau at a press briefing on May 17.
Under the decision, credit organisations will apply business interest rates including capital mobilisation and loan interest rates in Vietnamese Dong (VND) based on business interest rates not exceeding 150 percent of the basic interest rate regulated by the SBV for each period.
The application of the basic interest rate serves as a tool to manage the money policy and as a foundation for credit organisations to fix business interest rates and adjust interest rates of the inter-bank domestic monetary market.
This also shows that market interest rates help to create a reasonable level for capital mobilisation and loan interest rates that harmonises the interests of depositors, credit organisations and loan borrowers.
General Secretary of the Vietnam Banks’ Association (VNBA) Duong Thu Huong said that at a meeting on the same day between the SBV Governor and commercial banks’ general directors, they favoured a project to change the SBV’s mechanisms for interest rate adjustment as it will help banks adjust their interest rates in line with the market in the same way as the US Federal Reserve has done.
VOV
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