Sep 9, 2011. Six Vietnamese commercial banks, including the country’s two biggest listed lenders, cut borrowing costs for businesses as the government strives to make credit cheaper to protect economic growth.
VietinBank, or Vietnam Joint Stock Commercial Bank for Industry & Trade, Joint-Stock Commercial Bank for Foreign Trade of Vietnam, also known as Vietcombank, and others lowered dong lending rates for loans to businesses and manufacturers to a range of 17 percent to 19 percent, according to a statement on the State Bank of Vietnam’s website today.
Asian nations from Vietnam to India face a growth slowdown as the global recovery falters, adding pressure to prop up expansion even as inflation remains elevated. Vietnam’s government, which faces a 23 percent inflation rate, said last month the central bank will keep policy interest rates unchanged for now and consider cutting them if price gains slow.
“We do see a lot of other Asian central banks stopping in their tracks, more or less putting the tightening cycle on the backburner right now,” said Vishnu Varathan, an economist at Capital Economics (Asia) Pte in Singapore. “A similar concern could be ripping through the policy circles in Vietnam. While they do remain cognizant it’s still too premature to reverse out the cycle, they’re afraid of stifling the productive sector.”