SBV cuts ceiling interest rates by 1%

The ceiling lending interest rate will be correlatively slashed from 15% to 14% per year on the same day, applied to four prioritised sectors including export, agriculture, rural areas and small- and medium-sized enterprises.

Interest rates used as management tools to be adjusted down include the refinancing rate from 13% to 12%, the discount rate from 11% to 10%, and the inter-bank electronic payment rate from 14% to 13%.

The State Bank said the interest rate reduction aimed to help solve difficulties for production and business activities in accordance with the Government direction.

It said economic improvement, especially easing inflationary pressure, facilitated the move. The consumer price index (CPI) edging up 0.18% in May and increasing 2.87% in the first five months of this year was suitable to the target the National Assembly had set out for this year, it said.

Assured bank liquidity and a stabilising monetary market were also advantages, it added.

The central bank noted that although interest rates had gradually declined, their slow progress together with rising credit risks still significantly challenged businesses in the face of falling purchasing power and increasing inventories.

Before yesterday's move, interest rates had been slashed three times this year./.