Vietnam cuts benchmark rates

The central bank has cut loan interest rates by 1 percentage point with effect from Friday.

On Tuesday, the State Bank of Vietnam announced it was cutting the prime interest rate to 10 percent and reducing the overnight inter-bank and the refinancing interest rate to 11 percent and the discount rate to 9 percent.

The central bank also cut the interest rate it pays commercial banks for their compulsory reserves by one percentage point to 9 percent. It has also lowered the rate paid for compulsory reserves of dong deposits from 7 percent to 6 percent.

The State Bank of Vietnam has cut the prime interest rate four times in the last two months, reducing the official rate from a high of 14 percent. Earlier this year, the central bank raised rates to combat inflation, which now seems to be under control.

By Ham Yen – Translated by Thuy Doan

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