The State Bank of Viet Nam (SBV) issued document No. 4462/NHNN-CSTT on May 29, urging all credit institutions including foreign bank branches in Vietnam to reduce lending annual interest rate by 1-2% in  

Under the document, the central bank directed credit institutions to channel capital into traditional growth drivers, emerging industries, green transformation, circular economy, and social housing.

Credit institutions need to strictly control credit in potentially risky sectors to ensure safe and effective credit operations, the document said.

Interest rates in Vietnam have dropped strongly recently, creating a gap between the USD and VND interest rates in the interbank market, putting upward pressure on the USD.

There have been more room for reducing deposit and lending rates, since operating rates were cut four times so far this year.

As of the end of February, deposit rates average 3.3% annually, 0.2% lower than the end of 2023, and lending rates average 6.3%, 0.7% lower.

The central bank targets to achieve a credit growth rate of 15% this year.