46 banks in Vietnam pledge to cut interest rates

The meeting, chaired by newly-appointed State Bank Governor Pham Duc An, came amid concerns over rising competition among banks for deposits, which has recently driven up interest rates across the market.

Vietnam’s National Assembly approved An, 56, chairman of the Da Nang City People’s Committee, as the new central bank governor for the 2026-31 term on Wednesday.

According to the central bank, several commercial banks have engaged in aggressive capital mobilization strategies, pushing deposit rates higher and, in turn, increasing lending rates.

In response, all participating banks agreed to bring down market interest.

The move is expected to provide relief to businesses grappling with high financing costs and to support consumer access to credit, thereby stimulating economic activity.

Governor An asserted that the central bank would closely monitor interest rate movements and require greater transparency, including public disclosure of lending rates on bank websites.

He also pledged that the central bank stands ready to provide liquidity support to ensure stability in the banking system.

Meanwhile, the central bank plans to intensify inspections and supervision to ensure banks comply with policy directives, with strict penalties for violations related to capital mobilization and credit issuance.

At the meeting, Pham Chi Quang, head of the Monetary Policy Department, reported that in the first quarter of the year, the central bank pursued a proactive and flexible monetary policy to stabilize the macroeconomy, control inflation, and promote growth.

Key measures included the active use of open market operations, with daily liquidity injections through repurchase agreements across varying maturities to stabilize the monetary market.

The central bank has also managed exchange rates and foreign currency markets in line with evolving conditions, intervening when necessary to absorb external shocks and maintain macroeconomic stability.

As for credit management, the central bank continues to target annual credit growth of around 15 percent, while directing banks to channel funds into productive sectors and priority industries.

Lending to high-risk areas, particularly real estate, remains under tight control to prevent a build-up of bad debt.

As of the end of March, credit growth had reached 2.65 percent at over VND19 quadrillion (US$722 billion).

Additionally, the State Bank has kept the policy rates unchanged in order to enable banks to access low-cost funding from the central bank and support the national economy.

However, escalating tensions in the Middle East have pushed oil prices higher, adding inflationary pressure, while strong domestic demand for capital to fuel economic growth presents further challenges for monetary policymakers.

On March 31, the State Bank issued a fiat urging banks to balance capital sources and usage to maintain liquidity and avoid disruptions to interest rate levels.