Vietnam’s central bank considers cutting policy rates further

Hanoi, May 12 : Vietnams central bank is lining up its options in case it needs to ease monetary policy further to support the economy and help the country meet its economic growth target for the year, local newspaper reported on Friday."Given the US Federal Reserve seen slowing its rate-hike pace, improved bank liquidity, the State Bank of Vietnam (SBV) will consider, based on the assessment of market conditions, lowering policy rates further," SBV Governor Nguyen Thi Hong told a meeting with local authorities and businesses in the countrys southeastern region.

Vietnamese banks total lending rose 3.04 per cent as of the end of April from the end of last year and grew 9.92 per cent from a year ago, according to the central bank.Banks are flush with cash but struggling to boost lending to individuals and businesses on worries about slowing growth tied to a slump in exports and construction, experts said.

The central banks governor also asked commercial lenders to cut operating costs and focus on lowering interest rates to support businesses.The call has been repeated by several senior officials after the central bank cut policy rates twice in March in an attempt to reduce the cost of funds for banks, Xinhua news agency reported.Vietnams economy in the first quarter grew 3.32 per cent, the second lowest quarter expansion rate since 2011, slowing from a growth of 5.92 per cent in late 2022 and 5.03 per cent in the first quarter last year, the General Statistics Office said.Vietnams gross domestic product is expected to grow 6.5 per cent this year, slower than last years expansion of 8.02 per cent.Meanwhile, inflation pressure is no longer as stressful as last year, Vietnams consumer price index in the first four months rose 3.84 per cent from a year, under the targeted annual inflation rate of 4.5 per cent, according to the statistics department.int/khz/ #Vietnams #central #bank #considers #policy #rates.