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Tuesday, June 18, 2024

SBV enhances efforts to slash interest rates to support Covid-19-hit firms

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HCMC – Due to the impact of Covid-19, from now until the end of the year, the State Bank of Vietnam (SBV) is considering extending the credit room and lowering interest rates to support firms and residents.

Speaking at a press briefing to announce the results of the September monetary policy governance on September 22, SBV Deputy Governor Nguyen Thi Hong said that the long-term plan of SBV includes attempting to cut lending rates. The central bank, therefore, is doing well to regulate liquidity and create more favorable conditions for credit institutions to have abundant capital sources.

Apart from lowering deposit rates, the central bank will be able to refinance local lenders with reasonable rates if necessary and direct credit institutions to reduce costs and offer more preferential loan credit to customers.

The SBV is also weighing a plan to raise the credit room for commercial banks if requested, Thanh Nien Online reported, citing the central bank.

Besides, the central bank will simplify borrowing procedures to make it easier for customers to get loans.

Aside from cutting deposit rates and lending rates, the central bank has revised down policy rates twice by a total of 1%-1.5% per year to support liquidity for credit institutions and help local banks access low-cost capital from the central bank, according to the SBV. The move was aimed at supporting firms and residents survive the hardship caused by the coronavirus.

Nguyen Tuan Anh, head of the Department of Credit Policies for Economic Sectors at SBV, said that the Covid-19 pandemic has taken a heavy toll on many sectors, prompting the credit institution system to adopt various measures, including waiving or reducing service fees, lowering interest rates and rescheduling debt payments, to support customers. Their actions have produced positive results.

As of September 14, credit institutions had rescheduled debt payments for over 271,000 customers and waived, cut or reduced interest rates for some 485,000 others. Further, local banks have offered new loans with preferential rates to 310,000 customers since January 23.

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