Vietnam: Bank of Vietnam cuts deposit rate cap to support lending growth
October 28, 2014
On 28 October, the State Bank of Vietnam (SBV) decided to reduce its dong deposit rate cap for terms of one to six months from 6.0% to 5.5%. Meanwhile, the SBV left its discount, refinance and repurchase rates unchanged at 4.5%, 6.5% and 9.0%, respectively.
The Bank decided to cut the deposit rate cap in an effort to support economic growth and revive lending. Lower interest rates could help the country meet the government’s 12%-14.0% credit growth target. The Bank stated that it would closely monitor domestic and global economic developments in order to ensure the stability of the exchange rate and the money market.
Author: Dirina Mançellari, Senior Economist