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Central Banks

Vietnam Seeks Low Market Lending Rates After Rare Rate Hike

  • Central bank says to continue managing dong in flexible manner
  • Banks must cap operating costs to keep lending costs low
Updated on

Vietnam’s central bank will urge commercial banks to find ways to keep lending costs low, even after it delivered a rare monetary policy tightening to curb inflation and stabilize the currency.

The refinance rate and deposit rate were each increased by 100 basis points to 5% and 3.5%, respectively, effective Friday, according to the State Bank of Vietnam decision announced Thursday. The interbank overnight lending rate and the dong deposit rate cap were also adjusted upward, the central bank said.