25/05/2015 10:14 GMT+7 Email Print Like 0

Ministry cuts interest on State investment

Hanoi, May 25 (VNA) - In a move to ease businesses' access to loans, the Ministry of Finance has cut interest rates on State investment and export credit.

According to the ministry's newly issued Circular 76/2015/TT-BTC, effective from May 19, 2015, interest rate on State investment credit has been cut by 1.05 percent to 8.55 percent per year, while interest rate on State export credit has been reduced by 0.3 percent to 6.9 percent per year.

The interest rates, which stood at 12 percent in 2012, have been adjusted down consecutively during the past three years.

The circular replaces Circular 189/2014/TT-BTC, dated December 11, 2014, on interest rates on State investment credit, export credit, and interest rate difference calculated for after-investment support.

However, businesses said that only a few firms qualify for the low interest rates while many others have to continue paying high interest rates on bank loans.

They noted that interest rates commonly applied to businesses currently remain too high, averaging at 8-8.5 percent for short-term loans and 10-11 percent for long-term loans, causing them difficulty in the context of several power and petrol price hikes as well as the recent devaluation of the dong.

Businesses said that lending rates in Vietnam had remained too high when compared with inflation and other regional countries. Inflation in April did not increase and index for the entire year was estimated roughly at 3 percent, they added.

Vietnamese firms can successfully compete against other countries if the interest rate is around 7 percent on short-term loans and 9 percent on long-term loans, they said.

However, a representative of Asia Commercial Bank said that the rate of 11 percent is mainly applicable to non-production borrowers. State-owned commercial banks currently lend at 9 percent per year.