State Bank holds line on prime rate

HA NOI — The State Bank of Viet Nam yesterday announced it would retain the prime rate at 8 per cent in September for the tenth straight month, quelling market hopes that it might be lowered and borrowers enjoy a more affordable stream of income from this source.

The unchanged rate is seen as a sign of stability.

The refinancing and interbank electronic payment interest rates will also remain at 8 per cent and the discount rate, at 6 per cent.

The benchmark lending rate has been held steady since last November, having been lowered by a percentage point back in early 2009 to spur lending during the economic crisis.

Since the central bank gave the go-ahead for a negotiable interest rate mechanism in March, the prime rate has not had the direct impact on the market lending interest rate that it used to. However, the benchmark interest rate is seen as a way of signalling the monetary policy direction of the central bank at any given period.

Lending rates at commercial banks are now ranging from 12.5-15 per cent per year for Vietnamese dong loans but the SBV is trying to lower the rate to as little as 12 per cent in order to help enterprises access more credit. — VNS