Large banks continued to lower lending interest rates in the context of the low credit growth in the first half of 2020. From early July, a few state-owned banks have further cut lending rates by 0.2 0.5 percent per annum to support businesses after the pandemic.
Specifically, Commercial Joint Stock Bank for Agriculture and Rural Development of Vietnam (Agribank) announced a 0.2 percent reduction in lending rates on June 30th. For the five priority areas, the highest short-term lending rate is currently 4.8 percent per annum, while the lowest medium and long-term lending rate is 7.5 percent per annum.
From July 1st, Commercial Joint Stock Bank for Investment and Development of Vietnam (BIDV) also decreased lending rates by 0.5 percent per annum compared to the current interest rates.
Thus, from the beginning of the year until now, large banks have continuously lowered lending interest rates by three times, some banks cut the rates by 2.5 to three percent per annum compared to the time before the pandemic. Not only Agribank and BIDV, another state-owned bank is also intending to further reduce lending rates.
By mid-June, due to the low borrowing demand, the credit to the economy only increased by 2.13 percent compared to the end of 2019, less than half of what was achieved in the same period of last year.
The interest rate cut of large banks is following the direction of the SBV to support businesses facing difficulties caused by the pandemic. This is also a solution to boost credit demand for banks.
