Vietnam central bank cuts interest rates again to spur growth

VIETNAM’S central bank said on Friday (Jun 16) it was cutting its key interest rates by 50 basis points, its fourth policy rate adjustment this year, to support slowing economic growth amid global uncertainties.

The refinancing rate was cut to 4.5 per cent, the discount rate to 3 per cent and the electronic interbank rate to 5 per cent, the State Bank of Vietnam (SBV) said. The change is effective from Monday.

The move is a bid to shore up Vietnam’s manufacturing-led economy at a time of weak global demand and slower credit growth. Earlier on Friday, the government urged the central bank to “immediately take practical measures to lower interest rates level, with a round of policy rate cuts this month”.

Vietnam’s economic growth slipped to 3.3 per cent in the first quarter from 5.9 per cent in the fourth quarter, due to weak demand in key export markets, while manufacturers have been dealing with both falling orders and electricity cuts due to power shortages.

The regional manufacturing hub reported a 12.3 per cent decline in exports in the first five months of this year, dragged by shrinking shipments of key products such as smartphones, electronics and garments. REUTERS