Hanoi (VNA)൲ - The State Bank of Vietnam (SBV) hasannounced two decisions to further reduce policy interest rates, which will become effectivefrom May 25, 2023.

The first decision, No. 950/QD-NHNN, stipulates the interest rates of refinancing, rediscount, overnight interbank electronicpayment, and compensatory lending for capital shortfall in offset payments by the SBV to credit institutions (CIs). Under this decision, the interest rates of the overnight interbank electronic payment and compensatory lending for capitalshortfall in offset payments by the SBV to CIs will been reduced from 6.0% per annumto 5.5% per annum. The refinancing interest rate will be lowered from 5.5% perannum to 5.0% per annum, while the rediscount interest rate remainsunchanged at 3.5% per annum. The second decision, No. 951/QD-NHNN, stipulates the maximuminterest rates of Vietnamese dong (VND) deposits of organisations andindividuals at credit institutions, as stipulated in Circular No.07/2014/TT-NHNN dated March 17, 2014. According to the decision, the maximuminterest rate of non-term and term deposits of less than one month remainsunchanged at 0.5% per annum. The maximum interest rate of deposits with termsfrom one month to less than six months will be reduced from 5.5% per annum to5.0% per annum. However, the maximum interest rate of VND deposits at thePeople’s Credit Fund and microfinance institutions will be lowered from 6.0% perannum to 5.5% per annum. The interest rate of deposits with terms of sixmonths or longer will be determined by the CIs based on the market supply anddemand for capital. The central bank’s decision to further cut the policy interest rates aims to stimulate economic growth, support liquidityin the interbank market, and provide favourable conditions for borrowing andlending activities within the banking system. These measures are expected toencourage investment and consumption, contributing to the overall stability anddevelopment of the Vietnamese economy. The SBV reassures the public and the banking sector that it willcontinue to closely monitor market developments and adopt appropriate monetarypolicies to maintain macroeconomic stability and ensure the efficientfunctioning of the financial system./.