The State Bank of Vietnam (SBV) late last week announced its first interest rate cut in the open market operation (OMO) in the past five years. (Photo: VNA) Hanoi (VNA) - TheState Bank of Vietnam (SBV) late last week announced its first interest ratecut in the open market operation (OMO) in the past five years.
The move is aimed at supportingeconomic growth as it will contribute to reducing the cost of funding forcommercial banks, thereby helping them cut lending rates for domestic firms.
Accordingly, OMO rates were lowered by25 basis points to 4.75 percent per annum. The last cut was made in March 2014when the rate was trimmed by 50 basis points to 5 percent.
Previously, at a meeting of the bankingindustry last week, Governor of SBV Le Minh Hung also said that after themeeting, the central bank would issue Resolution 01 on implementing tasks ofthe banking sector in 2018, in which it would instruct credit institutions toconsider a rate cut for lending interest. He said the central bank would also cutthe lending rate in the OMO market to aid institutions.
According to experts, the move willhave positive impacts on the monetary market, especially when capital demand isrising significantly to meet consumption and payments given theapproaching Lunar New Year.
Some commercial banks such asVietcombank, Agribank and Vietinbank have also announced reductions in theirlending interest rates over the past few days, as instructed by the centralbank, to spur economic growth. Accordingly, interest rates forshort-term dong loans will be lowered to 6 percent per year.
Apartfrom new loans taken this year, the rate would also apply to existing loanswith interest rates higher than 6 percent in five priority sectors ofagriculture businesses, firms producing goods for export, small- and medium-sizedenterprises, enterprises operating in auxiliary industries and hi-techenterprises, including startups.
In 2018, the Government aims at aneconomic growth of 6.7 percent after the local economy expanded by ahigher-than-expected 6.81 percent in 2017. Credit growth is set at 17 percent,slowing from 18.17 percent last year. However, the central bank said it willclosely monitor the market to make suitable adjustments from time to time.-VNA
In 2018, the Government aims at aneconomic growth of 6.7 percent after the local economy expanded by ahigher-than-expected 6.81 percent in 2017. Credit growth is set at 17 percent,slowing from 18.17 percent last year. However, the central bank said it willclosely monitor the market to make suitable adjustments from time to time.-VNA
VNA
