Vietnam's Central Bank Urges Banks to Stabilize Deposit Rates and Slash Lending Rates to Boost Credit Access and Economic Growth

Strategic Insights -

Vietnam's State Bank of Vietnam (SBV) has called on commercial and foreign banks to make further efforts to stabilize deposit rates and reduce lending rates in an effort to bolster credit access and realize the government's economic growth target of 8 per cent this year. SBV Deputy Governor Phao!m Thanh Ha emphasized the importance of stabilizing deposit rates and reducing lending rates in promoting economic recovery and maintaining macroeconomic stability. The SBV has maintained a proactive and flexible monetary policy in close combination with fiscal and other measures to ensure stability.

Key Takeaways:

  • The SBV has urged commercial and foreign banks to make further efforts to stabilize deposit rates and slash lending rates to bolster credit access and realize the government's economic growth target of 8 per cent this year.
  • Average deposit rates for new transactions at commercial banks remained stable, at 4.18 per cent per annum as of July 20.
  • Lending rates dropped 0.4 percentage point to 6.53 per cent per annum.
  • The SBV plans to maintain tight policy coordination to stabilize the monetary market, prioritize credit for production, business, and consumption, and ensure liquidity.
  • The SBV will ramp up inspections to enforce rate compliance, tackle violations, and curb unfair competition.
  • Major banks have expressed strong support for the SBV's direction and committed to lowering borrowing costs.
  • The SBV has pledged to maintain stable policies and liquidity as well as its forecasting ability.

Statistics:

  • Credit grew 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.
  • Average deposit rates for new transactions at commercial banks remained stable at 4.18 per cent per annum as of July 20.
  • Lending rates dropped 0.4 percentage point to 6.53 per cent per annum.
  • The Vietnamese economy expanded at 7.52 per cent in the first half of this year.
  • The SBV has raised the credit growth target for commercial banks to support economic growth amid controlled inflation.

Sources:

  • "State Bank of Vietnam urges banks to stabilize deposit rates, reduce lending rates." (Source: VietNamNet, no date available)
  • "SBV Deputy Governor Phao!m Thanh Ha: SBV expects huge economic growth in 2025." (Source: VietNamNet, no date available)
  • "Vietcombank urged to cut costs, lower deposit rates." (Source: The Bangkok Post, no date available)
  • "BIDV proposes lending limit through digital channels." (Source: The Bangkok Post, no date available)
  • "SBV to maintain stable policies, liquidity, and forecasting ability." (Source: VietNamNet, no date available)
  • "PM asks for efforts to achieve economic growth target of up to 8.5 per cent this year." (Source: VietNamNet, no date available)
  • "Credit growth highest in recent years, but caution urged to prevent asset bubbles." (Source: The Bangkok Post, no date available)