Hanoi (VNA) – Witha positive macroeconomic background at the moment, interest rates willbasically stay steady until the end of the year due to excessive liquidity and proper credit growth, according to an official fromthe State Bank of Vietnam (SBV).

Central banks in manycountries no longer pursuing tight monetary policies has eased the pressure on domestic interest rates, said Pham Thanh Ha, head of the SBV’s Monetary PolicyDepartment.

The SBV’s recent cut ofreference interest rates will allow credit institutions to access capital fromthe SBV at a lower cost and stablise their own rates, Ha said.

In the time ahead, the SBVwill continue monitoring local macroeconomic trends and monetary market toflexibly employ monetary policy instruments, in order to control inflation,stablise the macroeconomy and support economic growth, he said, adding the central bank will maintain a 14-percent credit growthtarget for this year.

On September 16, the SBV cut several key interestrates by 0.25 percentage point to support economic growth. The rate cuts were thefirst by the SBV since October 2017.

Accordingly, the annualrefinancing rate and rediscount rate were lowered from 6.25 percentto 6 percent, and from 4.25 percent to 4 percent, respectively.

The annual overnightelectronic interbank rate and rate of loans to offset capital shortage inclearance between the central bank and domestic banks were also cut to 7 percent.

The interest rate of bidsof valuable papers through open market operations was reduced from 4.75percent to 4.5 percent.

According to the SBV, itpreviously took monetary policy measures to stabilise interest rates amidrising rates in the international market, which contributed to macroeconomicstability and supported growth at reasonable levels.

However, it has decidedto make the new move as the global economy has become more volatile and lessfavourable, while central banks of many countries, including the US FederalReserve (Fed) and the European Central Bank (ECB), have cut key interest rates.

The cut was madewith the macroeconomy remaining stable, the economy expanding6.76 percent in the first half of the year, inflation put under control, and the monetary and foreignexchange markets staying stable, the SBV said in the statement.

It is considered areference for the market to follow suit. It would also be an effective measureto support liquidity for commercial banks, helping them cut input costs so asto ensure the stability of lending interest rates./.