On August 6, the State Bank of Vietnam announced the decision to reduce some of the State Bank's policy interest rates with the reduction of 0.2 - 0.5% per year that took effect immediately.

This is the second time in 2020 that the State Bank of Vietnam has reduced the above policy interest rates. The most recent adjustment was on March 16, 2020.

Accordingly, in Decision 1349/QD-NHNN, the interest rate for compulsory reserve deposits in VND is 0.5% p.a. and the interest rate for deposits in excess of required reserves in VND is 0% p.a., decreased by 0.5% compared with the previous interest rate issued by the State Bank under the decision signed on March16, 2020.

Decision 1350/QD-NHNN clearly stated that the deposit interest rates in VND of the Vietnam Development Bank, the Bank for Social Policies, the People's Credit Fund and the Microfinance Institution at the State Bank also dropped to 0.8% p.a., down by 0.2% compared to the interest rate adjusted by the State Bank on March 16.

Also in Decision 1351/QD-NHNN, the deposit interest rates of the State Treasury, Deposit Insurance of Vietnam at the State Bank dropped to 0.8% p.a., equivalent to a decrease of 0.2% compared to the interest rate issued by the State Bank together with a decision signed on March 16, 2020.

According to the State Bank, the above interest rate adjustment decisions are issued in line with macroeconomic developments as well as the interest rate level in the market.

The State Bank said that from the beginning of the year to date, the State Bank has synchronously implemented many solutions to regulate monetary policy to stabilize the macro-economy, through which the money and foreign exchange markets are controlled and the market interest rate level decreased.

Kylie Nguyen