Several banks swiftly lowered deposit interest rates last week, paving the way for reductions in lending rates in the near future to bolster businesses and fuel recovery.

Several commercial banks have started reducing deposit interest rates by 0.1 to 0.4 percentage points in response to the Prime Minister’s direction to lower rates to help achieve the Government’s 8% growth target in 2025.

Prime Minister Pham Minh Chinh has issued an official dispatch calling for intensified efforts to lower lending rates to support businesses and spur economic growth.

Many banks have promoted capital mobilisation policies right from the beginning of 2025 to improve financial strength and meet the credit demand that is forecast to increase sharply this year.

The State Bank of Vietnam (SBV) has issued a circular on interest rates applied to US dollar (USD) deposits of organisations and individuals at credit institutions and foreign bank branches.

Authorities have continuously warned Vietnamese businesses to stay prudent when trading with foreign partners in the face of a recent scam increase.

Despite low interest rates, bank deposits have reached a new historic peak of VND16 quadrillion (US$628.5 billion) as of the end of March, according to the latest data from the central bank.

Credit within the banking system to the end of May 2024 increased by only 2.41% against the end of 2023, far from the credit growth target, the Government reported.

Many banks have adjusted up savings interest rates by 0.2-0.3% per year since early this months to lure depositors in the context that the savings amount at the banking system has declined for the first time after 25 consecutive month increase.

A decrease in deposit interest rates has been recorded in a number of banks from the beginning of April.