Even before the rate cuts some banks had dropped their deposit interest rates as if to prepare for a cut in lending interest rates in the near future. For instance, in late June Đông Á Joint Stock Bank reduced its deposit interest rates across the board. They were most likely referring to the rather large spread that had developed between the loan and deposit interest rates. Analysts said this means that cuts in loan interest rates have a much greater influence on businesses than any cuts in income tax rates. Another reason is that the size of the Vietnamese auto market is not large enough to attract foreign auto parts manufacturers.

Source: Viet Nam News July 17, 2017 03:08 UTC