Interest rates for agricultural loans have fallen to just 8% per year.

The prevailing lending interest rate for the agricultural and rural sectors is currently between 8-11% per year.

Illustrative image

The State Bank of Vietnam has just announced the deposit and lending interest rates at credit institutions for the week of May 6-10, 2013. Accordingly, for VND deposits during the week, some credit institutions adjusted their deposit interest rates downwards, below the maximum interest rate for Vietnamese Dong deposits as stipulated by the State Bank of Vietnam.

Specifically, state-owned commercial banks have adjusted deposit interest rates by 0.2-0.5% per year for terms from 1 month to less than 12 months. Currently, interest rates for demand deposits and term deposits under 1 month are commonly at 1.5-2% per year, 1-month term at 5-6% per year, 2-month term at 6.5% per year, from 3-11 months at 7% per year, and from 12 months onwards at 8-9% per year.

Commercial banks are offering deposit interest rates close to the maximum rate for Vietnamese Dong deposits as stipulated by the State Bank of Vietnam. Currently, common rates are 1.6-2% per year for demand deposits and deposits with maturities under 1 month, 7.3-7.5% per year for maturities from 1 month to under 12 months, and 9.5-11% per year for maturities of 12 months or more.

Also this past week, along with the decision to cut deposit interest rates, banks also adjusted lending interest rates downwards to support customers. For example, the Vietnam Investment and Development Bank (BIDV) reduced the maximum lending interest rate for priority sectors from 11%/year to 10%/year; reduced it by 0.5-1%/year for normal production and business activities, now at 11-11.5%/year; the Vietnam Joint Stock Commercial Bank for Industry and Trade (Vietinbank) adjusted lending interest rates for production and business activities to 11-11.5%/year; and for priority sectors, the rate is commonly 8-11%/year.

Currently, the prevailing lending interest rates for agriculture, rural areas, exports, small and medium-sized enterprises, supporting industries, and high-tech enterprises are 8-11% per year; lending interest rates for other production and business sectors are 10-12% per year at state-owned commercial banks and 12-14% per year at joint-stock commercial banks; in particular, some enterprises with sound and transparent financial situations and effective production and business plans and projects have been granted loans by commercial banks at interest rates as low as 7.5-8% per year.

According to (vov.vn) - LT