At a regular government press briefing on November 4, SBV Deputy Governor Pham Thanh Ha said commercial banks had reduced listed deposit rates by 0.5 percentage points per year for terms of six months or longer.
The government's regular October press briefing held by the Government Office on November 4 (Photo: Nhat Bac).
The cuts were an initial result of measures introduced by the central bank to lower market interest rates, as the economy faces rising demand for capital to support its growth targets.
Ha said domestic interest rates had come under considerable pressure amid strong demand for funding and complicated global economic conditions, with several central banks raising their rates.
In response, the SBV had rolled out a range of coordinated measures to bring down market rates.
In October, the central bank instructed credit institutions to mobilise resources, cut costs, share profits and take decisive action to reduce lending and deposit rates.
Under the directive, banks were required to lower listed and newly incurred deposit rates by 0.5 percentage points per year for terms of six months or longer, while cutting lending rates by 1.5-2 percentage points for production, business activities and priority sectors.
The measures have begun to produce results. Commercial banks have reduced listed deposit rates by 0.5 percentage points per year for maturities of six months or longer, in line with the SBV's directive.
State-owned commercial banks and wholly foreign-owned banks generally cut rates by 0.5 percentage points, while joint-stock commercial banks made reductions of 0.5-0.7 percentage points.
Average rates on newly mobilised deposits in late October were around 0.4 percentage points lower than in mid-October, Ha said.
On the lending side, average rates on new loans in late October fell by approximately 0.2-0.5 percentage points compared with the middle of the month.
More than 20 banks have also announced preferential credit programmes for production, business activities and priority sectors, offering interest rate reductions of 1.5-2 percentage points.
Alongside the rate cuts, the SBV has continued measures to support liquidity and funding for credit institutions, using monetary policy instruments including open-market operations, refinancing and short-term foreign currency-VND swaps.
On November 3, the central bank announced a six-month foreign currency-VND swap facility for credit institutions.
The measure is intended to provide banks with relatively longer-term VND funding, improve liquidity across the banking system, ease interest rate pressures and support the country's growth ambitions.
Looking ahead, Ha said the SBV would continue monitoring domestic and global economic developments and maintain flexible monetary policy to help control inflation, stabilise the macroeconomy and support sustainable growth.
The central bank will also closely monitor foreign exchange market conditions at home and abroad, managing the exchange rate flexibly in line with market conditions. Exchange rate policy will be coordinated with other monetary tools to stabilise the foreign exchange market, contain inflation and support economic growth.
Credit policy will be adjusted in response to macroeconomic developments and the economy's capacity to absorb capital, with the aims of promoting growth, controlling inflation and ensuring the banking system's safety.
The SBV will continue urging credit institutions to implement measures to lower interest rates, Ha added.
Also speaking at the briefing, Minister and Government Office Chairman Doan Xuan Phong said interest rate reductions were among the key issues recently addressed by the Prime Minister and had attracted considerable public attention.
He called on the central bank to step up inspections and supervision of commercial banks to ensure the cuts were implemented substantively rather than as a formality.
The required reductions of 0.5 percentage points in deposit rates and 1.5-2 percentage points in lending rates must be closely monitored, he said.
