Under the decision, the refinancing interest rate is lowered to 14 percent per annum, the overnight rate in the inter-bank electronic payment to 15 percent and the discounting rate to 12 percent.
The SBV also decided to reduce the maximum VND mobilizing interest rate per year to 5 percent for demand and term deposits with a term below one month and to 13 percent for term deposits over one month. The maximum VND mobilizing rate is at 13 percent per year, down by one percentage point.
Local people's credit funds are exceptionally permitted to apply the maximum VND mobilizing rate of 13.5 percent per year, 1 percent less than the previous level.
At a Government meeting on March 6, SBV Governor Nguyen Van Binh said key interest rates would be lowered by 1 percentage point and the deposit interest rate ceiling at credit institutions would be also reduced by 1 percentage point. As a result, the basic interest rate is at 8 percent, down from 9 percent.
Over the several past consecutive months, inter-bank interest rates have fluctuated from 7 percent to 14 percent per year, depending on the term, and the overnight inter-bank rate stood at 7-8 percent. The highest rate for one month was also at 13-14 percent. The rates showed the improvement in liquidity of banks.
The deposit interest rate will probably be cut to 10 percent by late this year, if all anti-inflation measures are in place.
Commercial banks have prepared to cut lending rates as part of their commitment to the SBV to facilitate business access to capital sources for production.