Vietnam: SBV cuts rates for fifth time this year
June 29, 2012
On 29 June, the State Bank of Vietnam (SBV) reduced its key refinancing rate by one percentage point to 10%. In addition, the SBV cut the discount rate to 8.0% from 9.0%. The move follows on a previous cut on 1 June and represents the fifth rate cut since the beginning of the year. Monetary authorities lowered rates in an effort to revive economic growth, which slowed to a 4.4% increase in the first half of 2012, down from the 5.6% expansion seen in the January-June 2011 period. With inflation firmly on its way down, the SBV has ample room for manoeuvre. While Vietnam still boasts one of the highest levels in the region, inflation has plummeted from an almost three-year high 23.0% recorded in August 2011 to the 6.9% recorded in June.