“The change is in conformity with Government policy and State Bank of Vietnam measures to lower lending interest rates,” the official who asked to disclose the name said.

The central bank recently injected additional capital into the commercial banking system via open market operations and took other steps to encourage banks to trim rates.

State Bank Governor Nguyen Van Giau has said that the central bank would continue to support commercial banks with more capital in order to keep interest rates in check and reduce the inflationary pressure caused by high interest costs.

State-owned banks like Agribank, Vietcombank, Vietinbank and the Bank for Investment and Development of Vietnam (BIDV) have cut rates to around 14 percent from a recent spike of 16-18 percent, while private banks are offering slightly higher rates of 15-18 percent.

A representative of Asia Commercial Bank, who asked to remain unnamed, said the bank had VND30 trillion (US$1.6 billion) to lend at 14.5-15 percent a year for medium-and long-term loans.