SBV pushes rate cuts to support economic growth

SBV pushes rate cuts to support economic growth

At a conference held on Monday in Hà Nội, SBV Deputy Governor Phạm Thanh Hà said that stabilising deposit rates and reducing lending rates are key tools to promote economic recovery and maintain macroeconomic stability.

The State Bank of Vietnam (SBV) has urged commercial and foreign banks to make further efforts to stabilise deposit rates and slash lending rates to support economic growth. — Photo tapchitaichinh.vn

The State Bank of Vietnam (SBV) has urged commercial and foreign banks to make further efforts to stabilise deposit rates and slash lending rates in a move to bolster credit access and realise the Government’s economic growth target of 8 per cent this year.

At a conference held on Monday in Hà Nội, SBV Deputy Governor Phạm Thanh Hà said that stabilising deposit rates and reducing lending rates are key tools to promote economic recovery and maintain macroeconomic stability.

The SBV has maintained a proactive, flexible, timely and effective monetary policy in close combination with fiscal and other measures to ensure stability, he said.

The first-half growth in 2025 was the strongest in the past five years, with inflation at 3.27 per cent, within the National Assembly’s ceiling. Credit jumped 9.8 per cent from the end of 2024 and 19.8 per cent year-on-year as of July 29.

Benchmark interest rates were unchanged, with the SBV using targeted tools to maintain liquidity, said head of the Monetary Policy Department Phạm Chí Quang.

Average deposit rates for new transactions at commercial banks remained stable, at 4.18 per cent per annum as of July 20, while lending rates dropped 0.4 percentage point to 6.53 per cent per annum. Banks rolled out rate-cutting offers and published rates online to boost transparency and access to capital.

The SBV plans to maintain tight policy coordination to stabilise the monetary market, prioritise credit for production, business and consumption, and ensure liquidity. It will ramp up inspections to enforce rate compliance, tackle violations and curb unfair competition, while flexibly managing exchange rates to counter global pressures, he said.

He called on credit organisations to cut costs and profits to lower lending rates further, supporting households and firms. Credit growth must target manufacturing, business and priority sectors while loans must be restricted for high-risk sectors.

Major banks stand ready

Executives from major banks at the conference expressed strong support for the SBV’s direction and confirmed their commitment to lowering borrowing costs.

CEO of Vietcombank Lê Quang Vinh said that the bank committed to maintaining reasonable deposit rates, at the same time urging the SBV to reduce the ceiling on deposit rates in order to help banks reduce costs, thereby supporting production and commercial activity.

Vinh also urged the SBV to consider increasing the ratio of State Treasury deposits in the short-term capital structure to help banks increase credit availability.

Phạm Toàn Vượng, general director of Agribank, said that the bank will continue to reduce operation costs, adjust the structure of its loan terms and speed up digital transformation to keep interest rates at reasonable levels.

The SBV needs to closely monitor compliance with interest rates by commercial banks to ensure overall efficiency, Vượng said.

General director of BIDV Lê Ngọc Lâm proposed that the SBV increase the lending limit through digital channels, which currently stands at VNĐ100 million (US$3,820) to meet real demand while reducing credit costs.

At the conference, Hà said that the SBV pledged to maintain stable policies and liquidity as well as its forecasting ability.

He also urged commercial banks to urgently implement solutions to stabilise and reduce deposit and lending rates by cutting operation costs and enhancing technology applications.

Enhancing transparency in lending rates and controlling credit flow into high-risk sectors are also important, Lâm said.

“The banking system has sufficient resources, determination and confidence to fully implement its commitment to stabilise deposit rates and reduce lending rates, thus making an important contribution to the country’s economic growth,” he said.

Prime Minister Phạm Minh Chính at a Government meeting on Monday also asked for efforts to achieve the economic growth target of up to 8.5 per cent this year.

The Vietnamese economy expanded at 7.52 per cent in the first half of this year, its highest growth rate in the past five years.

Last week, the SBV announced that it has raised the credit growth target for commercial banks to support economic growth amid controlled inflation.

According to Phùng Thanh Quang from the School of Banking and Finance under the National Economics University, credit is an important resource to drive economic growth in Việt Nam. Credit growth from January to July was among the highest it has ever been in recent years, he said, urging caution to prevent asset bubbles, which might negatively affect the asset quality of the banking system. 

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