Vietnam's central bank to cut policy rates further from Thursday-Xinhua

Vietnam's central bank to cut policy rates further from Thursday

Source: Xinhua| 2023-05-24 00:09:00|Editor: huaxia

HANOI, May 23 (Xinhua) -- The State Bank of Vietnam will cut the refinancing rate by 50 basis points to 5 percent from May 25 in the latest move to support economic growth, Vietnam News Agency reported on Tuesday.

The central bank will also cut overnight electronic interbank rate to 5.5 percent from 6 percent, while the discount rate will be kept unchanged at 3.5 percent, said the report.

This is the third cut since March when the refinancing rate stood at 6 percent and the discount rate was 4.5 percent.

The move is aimed at supporting commercial banks in providing loans to businesses and households, thus helping firms to get through the ongoing economic uncertainty and boosting domestic demand, according to the report.

The total lending of Vietnamese banks has remained sluggish, hitting a decade-low in April, said Fitch Ratings.

According to Vietnam's central bank, as of April 20, the credit growth in the banking system was up 2.57 percent from the end of last year, lower than the growth of 6.42 percent in the same period a year ago.

Experts said liquidity crunch has eased in recent weeks but banks still find it hard to boost lending to businesses and individuals on worries about an economic slowdown and continued sluggishness in the property sector.

Vietnam's export-driven economy is facing headwinds from a global downturn as its first-quarter gross domestic product growth slowed to 3.32 percent from 5.92 percent in the fourth quarter last year, according to the General Statistics Office.