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Interest rates remain stable after base rate cut
It is reported by the Monetary Policy Department of the State Bank of Vietnam (SBV) that both mobilizing and lending rates in the domestic money market have tended to decline since the State Bank of Vietnam decided to cut down the base interest rate to 8.5 percent p.a. from 10% p.a. together with other interest rates and reserve requirement, starting on December 22.
Right on December 22, all commercial banks started without delay to decrease the maximum lending rate to the lowest level of 12.75% p.a. over the past two years which is 2% lower than that of 2007 and 8,25% lower than the highest rate recorded in June 2008.
The Joint-Stock Bank for Foreign Trade of Vietnam (Vietcombank) significantly reduced the lending rate by 2% to 8.5% p.a. from 10,5% p.a while other state-owned commercial banks (SOCBs) slightly reduced their lending rates by 0.12% - 1 % p.a. for priority customers in export, rural development, small and medium enterprises (SMEs) and other sectors.
Following are the common lending rates of commercial banks:
- At the Bank for Investment & Development of Vietnam (BIDV): the common lending rate is 0.92% per month (11% p.a), the maximum lending rate is quoted at 0.83% per month (10% p.a) for customers in production and export, and SMEs.
- At the Vietnam Bank for Industry and Trade (VietinBank): the common lending rate ranges from 11% to 12.5% p.a, while the minimum lending rate is 10% p.a for production households, customers in export and other priority sectors.
- Vietcombank offers the common lending rate of 11% p.a, while quoting the minimum rate of 8.5% for customers in export and other priority clients.
- At the Vietnam Bank for Agriculture & Rural Development (VBARD): the maximum and minimum lending rates are 12.72% p.a. and 10.8% p.a. respectively.
- Joint- stock commercial banks quote the lending rates of 12.75% p.a as the lending cap defined by the SBV.
In addition to the decline in the lending rate, commercial banks are in massive reduction of mobilizing rates by 1% -2% p.a., specifically, the term mobilizing rates for below 3 months, 3-12 months and 12 months are down from 9% p.a. to 7%-8% p.a., from 9% p.a. to 8-8.5% p.a., and from 10% to 8%- 8.5% p.a. respectively.
The interest rate in the inter-bank market on December 22, 2008 was stable, overnight and term rates for below 1 month ranged from 8% to 9% p.a.
The liquidity in the market is still slightly excessive. The SBV continues to flexibly manage open market operations for supporting liquidity management of commercial banks.
The exchange rate of USD/VND has changed slightly under the certain pressure of the reduction of the base interest rate.
sbV
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