Vietnam's central bank cuts ceiling on deposit rates

1-month and 6-month term interest rate ceilings were eased to 0.8% and 5%, respectively.

The State Bank of Vietnam (SBV) lowered ceilings on interest rates that banks offer for 1-month and 6-month term deposits on the back of “macro-economic situations” as directed by the government, the central bank announced.

The maximum interest rate for demand below 1-month terms has been reduced to 0.8% from 1% previously, whilst ceiling interest rate for 6-month term deposits was eased to 5.5% from 6%.

The maximum short-term lending rate for the areas of agriculture and rural development, exports, support industries, SMEs and hi-tech enterprises was also to 7% from 7.5% previously.

The adjustments were made despite the central bank saying that the “macro-economy” was “stable” as of Q3. Economic growth reached 7.31% in Q3, whilst the average inflation in the first ten months of 2019 increased by 2.48%, SBV noted in its announcement.

The adjusted ceiling took effect on 19 November.