News of reduced operating interest rate debunked

As rumors surfaced that banks’ operating interest rate would be cut, Standing Deputy Governor of the State Bank of Vietnam, Dao Minh Tu affirmed that adjusting the operating interest rates or other monetary policy tools is not an appropriate solution for the current period.
News of reduced operating interest rate debunked

The State Bank would always wait for the right conditions to reduce operating interest rates or adjust the level of monetary policy tools, she added.

The level and timing of such adjustments must be calculated based on real conditions and still ensure inflation is controlled and money value stabilized. At the same time, macroeconomic stability, businesses and people’s benefits, and the security of banking operations must be preserved to ensure the country’s financial stability in the short and medium term.

The State Bank will continue to keep an eye out and make timely adjustments when the operating interest rate tool comes into play.

Its view is to manage interest rates reasonably to favor businesses and the people for the time being, while maintaining macro stability to quickly recover from the pandemic in the long run.

The State Bank will also support commitments to reduce interest rates for substantive support, the Deputy Governnor said.