The race among banks to raise interest rates has come to an end, with most banks beginning to reduce deposit and loan interest rates and the State Bank of Vietnam promising to continue cutting official interest rates.
Agriculture and Rural Development Bank (Agribank) yesterday cut its loan interest rate to 11 percent per year (or 0.9 percent per month). The interest rate will be offered at Agribank’s network of 2,200 branches.
Agribank also decreased its loan interest rate to existing export company customers to 7 percent a year from 9 percent a year to further the government’s aim of boosting exports to reduce the trade deficit.
Small and medium-sized commercial joint-stock banks agreed cut loan interest rates on short term loans to 13 percent per year.
The Bank for Foreign Trade of Vietnam (Vietcombank) adjusted its loan interest rate to 11 percent per year from 12 percent from December 2, 2008.
Nguyen Phuoc Thanh, General Director of the Bank for Foreign Trade of Vietnam (Vietcombank), said one of decisive factors for banks reducing interest rates was their liquidity becoming more stable. However, further reductions in lending interest rates will depend on the official rates set by the State Bank of Vietnam.
Banks may offer slightly lower interest rates for businesses that trade essential goods or exporters.
Thanh said from now to the end of 2008, if the consumer price index doesn’t fluctuate wildly, deposit interest rates may hover around 9 percent per year.