Lending interest rates

After the State Bank of Vietnam (SBV) reduced the benchmark interest rate by an additional 0.5 percent, effective from May 25, many commercial banks have started lowering their lending rates.

On May 11, the State Bank of Vietnam (SBV) and the People's Committee of Ho Chi Minh City jointly organized a conference to discuss monetary and credit solutions to support and promote the economy of the Southeast region.

After Vietcombank, HDBank has recently announced to lower lending interest rates for enterprises doing business in many industries with a total interest rate reduction of up to VND120 billion.

The recent sharp increase in deposit interest rates has pulled lending interest rates up by 3-4 percent per annum over the same period last year. In the face of highly increasing pressure on the USD/VND exchange rate, deposit interest rates have not cooled down yet, so the pressure on lending interest rates in the peak months of the year is still huge.

From the beginning of November 2022 to now, many securities companies have increased their margin lending interest rates by 1-1.5 percent compared to before.

The lending interest rates have returned to the interest rate before the Covid-19 epidemic, but the credit in the first 7 months of the year only grew by 4.03 percent, reaching one-third of the plan of the year.

Despite the State Bank of Vietnam’s efforts to improve credit growth, credit growth in the first 7 months of 2023 is still low.

The last two quarters of the year are the time when production, business activities, and consumer demand typically see an uptick. As a result, commercial banks are actively introducing interest rate incentive programs to boost credit demand.

As of June 30, the credit balance of the economy reached over VND12.49 quadrillion (US$528,893,952,962), an increase of 4.73 percent compared to the end of 2022.

Amid the context that central banks of many countries raised interest rates sharply, from September 23, the State Bank of Vietnam (SBV) decided to increase operating interest rates, which experts assessed as a timely action.

Several measures have been suggested at an online seminar held by the Government Portal on May 28 to help the corporate bond market maintain its stability and operate in line with the law to aid economic growth.

In the past week, deposit interest rates at many commercial banks continued to decrease.

During a seminar on "Opening Capital Flow into Production and Business" hosted by Tuoi Tre Newspaper on March 30, the Standing Deputy Governor of the State Bank of Vietnam (SBV), Dao Minh Tu, emphasized SBV's message to lower interest rates.

Lending interest rates have surpassed the 10 percent mark, piling pressure on many businesses in dire need of funding, a conference has heard.

Vietnam's lending interest rates are higher than many countries in the world, while last year, Vietnam was one of the countries with the lowest inflation level. This paradox needs to be explained to find solutions to ease the burden on businesses.

The interest rate cut is considered an appropriate solution to lower interest rates, boost production, and support economic recovery.

High lending interest rates will challenge the target of controlling inflation as well as production and business activities.

Despite decreased interest rates offered by commercial banks, businesses persons are still hesitant to borrow.

The State Bank of Vietnam (SBV) has developed a loose monetary policy for growth support.