Thu, 01 Jun 2023

HANOI, April 1 (Xinhua) -- The State Bank of Vietnam on Friday said it would cut the refinancing rate by 50 basis points to 5.5 percent from Monday in the latest policy move to support economic growth.

The discount rate will be kept unchanged at 3.5 percent and the overnight lending rate in the inter-bank market will remain at 6 percent, the central bank said in a statement on its website.

After the release of official data showing Vietnam's economic growth slowed to 3.32 percent in the first quarter, lower than an annual expansion of 5.03 percent in the same period a year earlier, the central bank signaled it might cut its policy rates further to support growth.

Vietnam's inflation in March down 0.23 percent from February might help give the central bank more room for the rate cuts.

The central bank also said it would lower caps on interest rates of deposits in Vietnamese dong by 0.5 percentage points to between 0.5 percent and 5.5 percent for maturities below six months.

The ceiling on interest rates for short-term loans in some priority sectors will be cut further to 4.5 percent from 5 percent.

Vietnam's central bank said a "flexible" monetary policy during global uncertainty would help support economic stability and strike a balance between growth and inflation.

The Southeast Asian country has set the target of keeping economic growth at 6.5 percent and inflation below 4.5 percent this year.

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