Bank Sector_Another Policy Rate Cut

The SBV has announced a second policy rate reduction in 2023, effective Apr 3. This announcement follows quickly in the wake of the first policy rate cut in mid-Mar 23.

Several policy rates cut by -50bps: 1) the refinancing rate is reduced by -50bps to 5.5%/year, 2) the cap on short-term lending rates for favored sectors is reduced to 4.5%/year (-50bps), 3) the cap on deposit rates for demand and term deposits of less than 1M is 0.5%/year (-50bps) and for term deposits of 1M to less than 6M is cut to 5.5%/year (-50bps).

Other policy rates were cut already. The overnight rate for interbank electronic payments and lending to compensate for capital shortages in clearing payments remains 6.0%/year, and the rediscount rate remains 3.5%/year. The SBV had reduced these rates by -100bps in mid-Mar 23.

For the complete report, please access here: Bank_Sector_Second Policy rate cut_Apr 2

Analyst: Tanh Tran, tanh.tran@yuanta.com.vn