The State Bank of Vietnam (SBV) this year removed the credit growth quota for foreign banks, but the policy remains for Vietnamese banks, due to concerns about rising bad debts, the security of the banking system and macroeconomic instability.

A decrease in deposit interest rates has been recorded in a number of banks from the beginning of April.

The central bank is focused on encouraging credit institutions to cut expenses, simplify credit granting procedures, and reduce lending interest rates to support the economy, an official has said.

The Joint Stock Commercial Bank for Foreign Trade of Vietnam (Vietcombank) continued slashing deposit interest rates on January 12, with the lowest standing at 1.7% per year.

Nearly 160,000 new enterprises have been established in Vietnam in 2023, up 7.2% year-on-year, according to the Ministry of Planning and Investment’s Business Registration Management Agency.

Experts forecast interest rates will drop about half a percentage point from now to the year’s end to stimulate production and business activities and fuel economic recovery.

Banks are reducing lending interest rates by 1-3% per year compared to 2022 to stimulate demand for home loans in the wake of the loan decline.

Banks have to lower lending interest rates to stimulate demand for new loans as credit growth falters and deposit interest rates have also dropped sharply.

Several measures have been suggested at an online seminar held by the Government Portal on May 28 to help the corporate bond market maintain its stability and operate in line with law to aid economic growth.

The State Bank of Vietnam (SBV) is set to further reduce regulatory interest rates on May 25, the third cut in a row since mid-March, expected to give a boost to the stagnant real estate market.

Banks have been steadily cutting deposit interest rates, which have reached around 8%, a move aimed at reducing lending rates to support businesses.

The State Bank of Vietnam’s (SBV) Ho Chi Minh City branch will continue to prioritise credit for production and business, especially in priority sectors, to boost economic recovery.

The open market operations (OMO) have been more stable this month after the State Bank of Vietnam (SBV) reduced its intervention in the market.

Lending interest rates in the remaining months of this year will stay relatively stable to help firms recover production after the pandemic.

The JSC Bank for Foreign Trade of Vietnam (Vietcombank) remained the best-performing credit institution and the largest contributor to the State budget among the listed ones in 2021.

After staying at a low level last year, deposit and lending interest rates will probably increase in the second quarter of this year as credit demand is high again when the COVID-19 pandemic is controlled and the economy rebounds further, according to experts.

Credit loans must be always available for production and business enterprises, especially those operating in such areas as agriculture, export and high-tech, Prime Minister Nguyen Xuan Phuc said on December 26. ​

Deputy Governor of the State Bank of Vietnam (SBV) Dao Minh Tu highly valued several banks’ interest rate cuts by an additional 2 percent annually to support businesses affected by the COVID-19 pandemic.

Domestic banks forecast that the lending interest rates would drop in line with the government’s policy to support production and business activities of enterprises.

Several local banks have reduced their interest rates in recent days, going against the banking sector’s general year-end trend of increasing rates to boost earnings.