HANOI, Feb. 26 — There is still room for the State Bank of Vietnam to make another policy interest rate cut in 2024 to boost economic growth, Vietnam News reported Monday, citing analysts from Saigon Securities Corporation.
According to the analysts, the reason for the rate cut was that the domestic economic activity had not yet returned to its potential growth trend while 2024 had been planned to be a breakthrough year for the government’s medium-term growth plan in the 2021-2025 period, reported Xinhua.
Lending interest rates on existing loans are predicted to decrease by another 50-100 basis points in the first half of 2024.
The analysts said it would be difficult for deposit interest rates to continually decrease sharply.
The 12-month deposit interest rates by the end of 2024 were forecast at about 5.5 per cent per year.
In 2023, the central bank cut policy interest rates four times by between 0.5 and 2 percentage points, resulting in reductions of around 2 percentage points in deposit and lending rates compared to the end of 2022.
As of the end of 2023, lending rates for prioritised sectors were reduced to below 4 per cent per year, while the average deposit rate was 3.5 per cent per year.
— Bernama
