Vietnam to cut lending rates by at least 1.5 percentage points

The Vietnamese government has requested that the State Bank of Vietnam (SBV) employ comprehensive and drastic measures to reduce lending rates by a minimum of 1.5 percentage points per year for both new and outstanding loans.

In a resolution passed at the regular cabinet meeting and a teleconference between the national government and local authorities on July 4, the government tasked the central bank with cooperating with relevant agencies and localities in adopting solutions to proactively and flexibly regulate monetary policies in order to ensure promptness, appropriateness, and effectiveness.

It also asked the banking system to give priority to the removal of difficulties for production and business activities, boost macro-economic growth and stability, and put inflation under control.

The government told the SBV to set an appropriate full-year credit growth target of roughly 13-15 percent.

The SBV must announce credit growth caps for commercial banks this year, ensuring an adequate capital supply to the economy.

It will also review lending requirements and make appropriate adjustments to facilitate enterprises and residents' access to credit.

The government told the SBV to quickly deal with poor-performing banks to ensure the banking system’s liquidity and safety.

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