Central bank to cut rates by 0.25 percentage point
The State Bank of Vietnam (SBV) announced today, September 13, that it would cut various policy rates to support economic growth amid rising global uncertainty, according to Tin Tuc news site.
The refinance rate will be lowered to 6% from 6.25%, starting September 16. The rediscount rate and overnight lending rate in the inter-bank market will be lowered by the same magnitude to 4% and 7%, respectively. Lastly, rates for financial instruments traded under the bank’s open market operations will be cut from 4.75% to 4.5%.
This is the first time the central bank has cut interest rates since October 2017. The rate cuts will help increase liquidity for banks to provide credit, stabilize the economy and the foreign exchange market and boost economic growth, SBV said in a statement.
The decision to cut rates comes as the global economy worsens and many central banks, including the U.S. Federal Reserve and the European Central Bank, have also applied rate cuts.