Hanoi, May 25 (IANS) The State Bank of Vietnam will cut the refinancing rate by 50 basis points to 5 per cent from Thursday in the latest move to support economic growth.
The central bank will also cut overnight electronic interbank rate to 5.5 per cent from 6 per cent, while the discount rate will be kept unchanged at 3.5 per cent, Xinhua news agency reported.
This is the third cut since March when the refinancing rate stood at 6 per cent and the discount rate was 4.5 per cent.
The move is aimed at supporting commercial banks in providing loans to businesses and households, thus helping firms to get through the ongoing economic uncertainty and boosting domestic demand, according to local media reports.
The total lending of Vietnamese banks has remained sluggish, hitting a decade-low in April, said Fitch Ratings.
According to the central bank, as of April 20, the credit growth in the banking system was up 2.57 per cent from the end of last year, lower than the growth of 6.42 per cent in the same period a year ago.
Experts said liquidity crunch has eased in recent weeks but banks still find it hard to boost lending to businesses and individuals on worries about an economic slowdown and continued sluggishness in the property sector.
Vietnam’s export-driven economy is facing headwinds from a global downturn as its first-quarter gross domestic product growth slowed to 3.32 per cent from 5.92 per cent in the fourth quarter last year, according to the General Statistics Office.
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