Soon after the State Bank of Việt Nam cut the reference rate by 0.25 percentage points, several banks have followed suit, lowering interest rates on loans to enterprises in five priority sectors. Most banks have cut their loan interest rates but kept their deposit interest rates unchanged. In the event, it is hard to see how they can reduce credit interest rates any further, which means the central bank’s rate cuts may not achieve their full intent. So analysts want the central bank to come up with other measures like reducing deposit interest rates and lowering its current open market operation (OMO) lending interest rate from the current 5 per cent. In fact, many have almost used up their full-year credit growth quotas assigned by the State Bank of Việt Nam (SBV).

Source: Viet Nam News July 24, 2017 01:52 UTC