ANNOUNCED AS TEMPORARYNo
The State Bank of Vietnam, since 2012, fixes the maximum lending rate on Vietnamese Dong-based short term credit that can be charged by domestic and foreign credit institutions to borrowers of several priority economic sectors. Short term credit to meet capital requirements for borrowers working for agriculture/rural development, production/trading for export goods, business of small and medium enterprises, supporting industries as specified from time to time, high tech industries etc. are eligible for such priority rates.
The maximum lending rates as above specified have been reduced several times as follows:
- 8 May 2012: 15%
- 11 June 2012: 13%
- 24 December 2012: 12%
- 26 March 2013: 11%
- 13 May 2013: 10%
- 28 June 2013: 9%
- 18 March 2014: 8%
News reports in March 2014 state that commercial banks in Vietnam were lending to the private sector at rates around 15%, suggesting that the maximum specified lending rates above (which apply only to certain sectors) are well below market rates.
The GTA includes state guarantees and other financial incentives that are likely to affect the restructuring and performance of firms facing international competition, whether from imports, in export markets, and from foreign subsidiaries.
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