HANOI, May 24 (NNN-VNA) – The State Bank of Vietnam will cut the refinancing rate by 50 basis points to five percent from tomorrow, in the latest move to support economic growth.
The central bank will also cut overnight electronic interbank rate to 5.5 percent from six percent, while the discount rate will be kept unchanged at 3.5 percent, said the report.
This is the third cut since March, when the refinancing rate stood at six percent and the discount rate was 4.5 percent.
The move is aimed at supporting commercial banks, in providing loans to businesses and households, thus helping firms to get through the ongoing economic uncertainty, and boosting domestic demand, according to the report.
The total lending of Vietnamese banks has remained sluggish, hitting a decade-low in Apr, said Fitch Ratings.
According to Vietnam’s central bank, as of Apr 20, credit growth in the banking system was up 2.57 percent from the end of last year, lower than the growth of 6.42 percent in the same period a year ago.
Experts said, liquidity crunch has eased in recent weeks, but banks still find it hard to boost lending to businesses and individuals, on worries about an economic slowdown and continued sluggishness in the property sector.
Vietnam’s export-driven economy is facing headwinds from a global downturn, as its first-quarter gross domestic product growth slowed to 3.32 percent from 5.92 percent in the fourth quarter of last year, according to the General Statistics Office.– NNN-VNA
