Deputy Prime Minister Nguyen Van Thang has called on Vietnamese banks to reduce lending interest rates by 1.5 to 2 percentage points for production, business, and priority sectors to ease borrowing costs and support economic growth. The request was made during a meeting on monetary policy management held on October 16, following directives from Party General Secretary and State President To Lam, as well as the Party Central Committee’s conclusion No. 106 issued on October 15.

Nguyen emphasized the ongoing collaboration between the State Bank of Vietnam (SBV) and the Ministry of Finance in coordinating monetary and fiscal policies. This cooperation, he noted, has contributed to controlling inflation, maintaining macroeconomic stability, protecting the banking system, and supporting economic growth. However, he acknowledged that a complex and unpredictable global environment continues to exert pressure on interest rates, the exchange rate, and inflation. High lending rates remain a challenge, increasing capital costs for both businesses and households, and restricting their access to credit. Additionally, concerns persist regarding bad debts and risks within the banking sector.

The Deputy Prime Minister urged the SBV to work closely with relevant agencies to implement substantive measures aimed at lowering lending rates. He stressed that monetary policy should be managed proactively and flexibly, in coordination with fiscal policy and other macroeconomic tools, while maintaining priorities of inflation control, macroeconomic stability, and economic balance. The government has set an ambitious target of achieving double-digit economic growth while ensuring the safety of the financial system.

Nguyen also directed the SBV to review past measures intended to stabilize interest rates and reduce borrowing costs, extracting lessons to develop more effective and timely solutions. He called for enhanced inspection and supervision to ensure that lenders comply with interest rate regulations and central bank directives. Credit institutions failing to stabilize rates or engaging in unhealthy interest rate competition are to face strict penalties.

Further, the SBV was instructed to guide banks in safely expanding credit, prioritizing production, business activities, and other key sectors. Banks involved in social housing lending programmes should receive refinancing at reasonable interest rates, under strict oversight to maintain asset quality and protect the banking system. On the issue of bad debts, Nguyen highlighted the need for timely and effective resolution measures, especially in high-risk sectors such as real estate, alongside continued restructuring of credit institutions to improve the banking system’s soundness, transparency, and compliance.

The government is also focusing on cracking down decisively on informal ownership arrangements, cross-ownership, hidden ownership, and any manipulative practices by related parties within credit institutions, aiming to prevent systemic risks. Finally, commercial banks are encouraged to reduce operating costs, speed up digital transformation, and enhance efficiency to create space for lending rate reductions beneficial to businesses.