SBV cuts base interest rate

Today, the State Bank of Vietnam (SBV) decides to cut the base interest rate to 7.0 percent p.a. from 8.5% p.a. together with several decisions on other interest rates.

Following are the specific decisions:

- Decision No. 172/QD-NHNN on cutting the base interest rate to 7.0% p.a. The decision will take effect on February 1, 2009.

- Decision No.173/QD-NHNN on reducing the refinancing rate to 8.0% p.a from 9.5% p.a, the rediscount rate to 6.0% p.a from 7.5% p.a, and the overnight rate in the inter-bank electronic payment and the rate of loans to finance short balances in clearing transactions between SBV and commercial banks to 8.0% p.a from 9.5% p.a. The decision will take effect on February 1, 2009.

- Decision No. 174/QD-NHNN on lowering interest rate of VND-denominated reserve requirement of credit institutions to 3.6% p.a from 8.5% p.a. The decision will take effect on February 1, 2009.

The above-mentioned movements aim at implementing urgent measures to proactively prevent economic recession, stabilize production, business and jobs, and secure social protection in the context of global financial crisis and economic decline

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