Nhan Dan - The Prime Minister has allowed the State Bank of Vietnam to further cut the VND-denominated base (prime) interest rate from 11% a year to 10% a year, taking effect on December 5, according to a document dated December 2 issued by the Governmental Office.

The, the maximum lending interest rate offered by credit institutions to ordinary customers correspondently declines to 15% from 16.5% a year.

The refinancing rate and the overnight lending rate in the inter-bank electronic payment is also reduced to 11% a year from the current 12% percent a year while the rediscount rate to 9% a year from the current 10% per year. The interest rate for required reserve for deposits in Vietnam dong has also been lowered to 9% a year from the current 10% a year.

In addition, the reserve requirement ratio in Vietnam dong and foreign currencies will also drop by 2%. The governor of the State Bank of Vietnam will decide specific reduction ratio for different types of credit institutions.