The Government has proposed the National Assembly (NA) to allow it to continue the 2% interest rate support policy for enterprises, cooperatives, and business households.

As the governance of the monetary policy has to concurrently guarantee multiple targets, including reducing interest rates, expanding credit, stabilising foreign exchange rates, and ensuring credit institutions’ safety, thorough consideration is needed before any steps are taken, Deputy Governor of the State Bank of Vietnam (SBV) Dao Minh Tu.

Vietnam’s maintaining the momentum of public investment will be crucial because it will rejuvenate economic activities, generate employment, and enhance domestic consumption, said ADB Country Director for Vietnam Shantanu Chakraborty.

The race to lower deposit interest rates among banks is expected to continue until the end of 2023, according to analysts.

The State Bank of Vietnam on October 3 offered 28-day treasury bills (T-bills) worth VND10 trillion (US$409.9 million) through the interest rate auction mechanism.

The Government has put forward a proposal to continue with the 2% interest rate support policy for enterprises, cooperatives, and business households, at a recent meeting of the National Assembly Standing Committee.

Going against the usual rule of gradual increases in the last months of a year, deposit interest rates in most banks are anchored at low levels, and even some continue to decrease.

The United Overseas Bank (UOB) has maintained its economic growth forecast for Vietnam at 5.2% for 2023 and 6% for 2024 while forecasting that Vietnam will continue to cut regulatory interest rates in the remaining months of this year to balance economic growth and inflation pressure.

The four biggest banks in Vietnam have strongly cut interest rates for various deposit terms to the lowest levels of the year.

Commercial banks have persistently reduced deposit interest rates, resulting in rates for many terms now standing at just above 6% per annum.