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Lending rates cut following State Bank ruling
Several commercial banks have cut loan interest rates by 1.5-2 percentage points to 17-19 per cent a year, following their agreement on interest rate cut made late last month in pursuant to the State Bank of Viet Nam's instruction.
Bank for Investment and Development of Viet Nam (BIDV) yesterday cut interest rates on short-term loans to 18 per cent and for mid- to long-term loans to 19 per cent a year.
Also, BIDV planned to lend up to VND10 trillion (US$479.62 million) to agricultural producers, seafood exporters and small to medium enterprises at a rate of 15-17 per cent a year.
Securities and real estate borrowers would be charged 19-19.5 per cent a year for all borrowing.
Sai Gon-Ha Noi Bank forecast lending of VND5.8 trillion ($278.18 million) in short-term loans to agricultural producers, livestock cultivators and small and medium businesses at a rate of 17-18 per cent a year.
Eximbank also offered exporters loans at an interest rate of 17 per cent a year for three-month loans.
Leaders of Sacombank, HDBank, Orient Bank and Nam A Bank yesterday announced a 17 per cent interest rate for approved borrowers in manufacturing, agricultural and export sectors.
"Interest rate cuts are feasible if economic data remains stable," Tien Phong Bank general director Vu Tu said.
Eximbank general director Truong Van Phuoc said interest rate cuts would be sharper and stronger this month because new capital regulations had helped banks cut capital input costs.
The new State Bank regulations now allows banks and non-credit institutions to lend more than 80 per cent and 85 per cent of their deposits respectively, compared to no more than 80 per cent and 85 per cent of their deposits before, in a bid to help banks circulate more capital on inter-bank and prime markets.
"Cutting interest rates is an urgent demand of the economy," said the State Bank's governor Nguyen Van Binh.
If interest rates remained high, banks would find it hard to lend, he said.
The State Bank's average lending interest rate in August was 18.73 per cent. The rate for agricultural producers and exporters was 16-21 per cent; for other manufacturers 18-22 per cent; non-manufacturers 20-25 per cent.
Binh said that in the first eight months of the year credit growth was 11.7 per cent, well below the entire year target of 18-20 per cent.
Credit growth in dong was estimated at 1.05 per cent from July and 3.94 per cent from the end of 2010 and credit growth in foreign currency was estimated to fall 0.82 per cent from July and increase up to 23.91 per cent from the end of 2010.
"It's not obligatory to achieve the year target of 20 per cent. Credit growth must be in line with the actual inflation rate and economic situations," Binh said.
Binh denied a rumour that the State Bank would inject a huge capital volume into the system over the next few months.
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