The State Bank of Viet Nam (SBV) on Thursday announced its decision to cut the interest rate it pays on commercial banks' reserves by 0.2-0.5 percentage points as part of its efforts to help the economy weather the impact of the COVID-19 pandemic.

The adjustment, which took effect immediately, was the second time this year following the cut on March 16.

The rate the SBV pays for the Vietnamese dong-denominated compulsory deposits that commercial banks hold there was cut to 0.5 per cent, and for non-compulsory deposits to zero per cent.

Meanwhile, the interest rate paid for compulsory deposits of the Vietnam Development Bank (VDB) and Vietnam Bank for Social Policies (VBSP); People's Credit Funds and microfinance institutions at the central bank will be reduced by 0.2 percentage points to 0.8 per cent per annum.

The interest rate for deposits of the State Treasury and the Deposit Insurance of Viet Nam at the SBV is revised down to 0.8 per cent per annum, down 0.2 percentage points.

The SBV said the adjustment was made based on macro-economic developments and the level of interest rates in the market. — VNS