SBV cut interest rates to support enterprises
08:22 | 21/10/2008
VGP – The PM permitted the State Bank of Việt Nam (SBV) to reduce 1%, from October 21, of the prime interest rate, refinancing rate and discount rate; impose the Vietnamese currency compulsory reserve interest rate of 10% on credit organizations. Also within October, these institutes are allowed to make premature withdrawal of compulsory SBV treasury notes in order to maintain their liquidity and extend credits.

The maximum lending interest rate applied by commercial banks will be 19.5% per year – Illustration photo

The PM ordered the SBV Governor to direct credit organizations to cut lending interest rate and timely provide sufficient credit capital for production, business, export and import activities; for agriculture and rural areas; for medium and small enterprises; key national-level investment projects and feasible and effective ones (including those on real estate).

SBV issued Decision 2316/QĐ-NHNN on October 20 to reduce the prime interest rate in Vietnamese currency from 14% down to 13% a year.

On the same day, the SBV Governor decided to double the compulsory reserve interest rate to 10% per year.

The refinancing rate, discount rate, overnight lending interest rate in electronic inter-bank payment and in compensation payment of the SBV were also readjusted by 1 percentage point. Accordingly, the refinancing rate was decreased from 15% to 14%; the discount rate from 13% to 12%; and the overnight lending interest rate from 15% to 14%.

At the same time, SBV informed to pay off VND 20,300 billion of treasury notes compulsorily issued since March 17, 2008 because of the premature withdrawal of credit organizations.

Together with those decisions, SBV required all credit organizations to pay attention to prevention of risks cause by the global financial crisis; mobilize capital at home and abroad, strictly control credit quality and properly readjust credit structure to pour capital in urgent areas.

SBV said that these solutions aimed at helping credit organization ensure their liquidity and capital mobilization, safe operations as well as facilitate investment and production.

By Hoàng Nguyên

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