State Bank cuts interest rates to support businesses amidst COVID-19 outbreak
17:36 | 17/03/2020

VGP – The State Bank of Viet Nam (SBV) has cut its policy rates starting March 17 with a view to supporting businesses amidst COVID-19 pandemic.

State Bank cuts interest rates to support businesses amidst COVID-19 outbreak

The COVID-19 pandemic is evolving complicatedly, leaving negative impacts on the global economy, the central bank said, citing the fact that to prevent recession, many foreign governments have adopted economic stimulus policies, one of which is policy rate cuts made by central banks. 

Specifically, the central bank reduced the benchmark refinance rate to 5% from 6% and the discount rate to 3.4% from 4%.

The overnight lending rate in the inter-bank market was lowered to 6% from 7% and the open-market-operation (OMO) rate, to 3.5% from 4%.

In addition, the bank reduced the caps on the interest rate of Vietnamese Dong-denominated deposits and loans by 0.25 – 0.5 percentage points, depending on the maturities.

Earlier, a series of commercial banks launched credit packages on preferential loans with a view to supporting businesses amidst COVID-19 epidemic.

The banking sector directed commercial banks to keep a close watch on production and damage levels in order to seek appropriate measures and resolve difficulties for their customers. 

Statistics showed that about VND 926,000 billion of debs have been affected by COVID-19 outbreak, accounting for about 14.27% of total debts in 23 credit organizations. 

Over 44,000 customers with a total debt of VND 222,000 billion would benefit from the programs via measures such as debt payment restructuring, interest rate exemption and reduction. 

The State Bank of Viet Nam is crafting a circular which will support credit organizations to restructure debt payment deadlines and offer borrowing interest rate reduction and exemption among the group of customers heavily affected by the epidemic.

The country has recorded 61 coronavirus cases, including 18 foreigners, of whom 45 are in hospital. The remaining 16 recovered and were discharged.

By Vien Nhu

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