Banks requested to further cut lending rates to support business production

The request was made in a directive on major task and solutions to spur socio-economic development, signed by the Prime Minister on April 21.

In the directive, the PM also asked the central bank to proactively take measures to manage credit growth and promote the disbursement of a VND120 trillion credit package for investors and home buyers of social housing projects.

Businesses during a recent meeting with the Prime Minister complained that they still find it hard to access bank loans as the lending interest rates stay high despite subsequent cuts.

The PM raised the question of why businesses complain bitterly of capital shortages and credit inaccessibility, while bank deposits keep rising, and asked bankers to remove bottlenecks to support business production.

Banks have recently moved to publicly disclose average lending interest rates, creating conditions for businesses to access cheaper, more transparent capital sources.

At a press briefing in Hanoi last week, Dao Minh Tu, deputy governor of the State Bank of Vietnam, reported that the average deposit and lending interest rates for new transactions were 3.2%/year and 6.5%/year, respectively, down about 0.5%. /year and 0.6%/year compared to the end of 2023.

He said the central bank would continue to encourage financial institutions to cut costs in an attempt to further lower lending rates moving forward.

He also revealed that the local credit market warmed up in March after two months of contraction in January and February, growing by 1.34% compared to late 2023.