The move is part of efforts to maintain macroeconomic stability, control inflation and support economic growth.
Photo for illustration - (Source: PL)
The State Bank of Vietnam (SBV) has directed credit institutions to reduce interest rates and channel more funding into production and business activities, as part of efforts to maintain macroeconomic stability, control inflation and support economic growth.
In a document issued on October 18, the central bank instructed lenders to strictly comply with government regulations and directives on interest rates while cutting costs, sharing profits and implementing coordinated measures to lower the overall interest rate level.
As an immediate measure, banks must reduce listed deposit rates by at least 0.5 percentage points per year for maturities of six months or longer. The SBV also warned against aggressive deposit-rate increases and unhealthy competition that could destabilise financial and monetary markets.
For lending, credit institutions were instructed to lower interest rates for borrowers, with reductions of 1.5-2 percentage points per year targeted at production, business activities and priority sectors.
The central bank also called for safe and effective credit growth, directing funding towards productive businesses, priority industries and key drivers of economic expansion.
Credit is expected to support feasible, strategically important infrastructure projects serving socioeconomic development, as well as science and technology, innovation, digital transformation, green transition, the digital economy, green economy and circular economy.
Education and training, along with cultural industries, were also identified as priority areas for financing.
The measures aim to ease borrowing costs for businesses, improve access to capital and ensure that credit supports productive economic activity while safeguarding the stability of Vietnam’s banking system.