Vietnam Lowers Interest Rates Once More to Boost Economic Growth
Vietnam’s central bank has announced its fourth policy rate adjustment this year, cutting its key interest rates by 50 basis points to support the country’s slowing economic growth amidst global uncertainties. The State Bank of Vietnam (SBV) stated that the refinance rate has been reduced to 4.5%, the discount rate to 3.0%, and the electronic interbank rate to 5.0%, with the change taking effect from Monday.
This move aims to bolster Vietnam’s manufacturing-led economy, which is experiencing weak global demand and slower credit growth. The government has urged the central bank to lower interest rates immediately, with a round of policy rate cuts this month. Vietnam’s economic growth rate fell to 3.3% in the first quarter of this year from 5.9% in the fourth quarter due to weak demand in key export markets, while manufacturers are struggling with falling orders and electricity cuts resulting from power shortages. The country’s exports have also declined by 12.3% in the first five months of this year, with shrinking shipments of key products such as smartphones, electronics, and garments.