Lending rates to stay below 15 pct for at least 1 year: central bank

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Vietnam's central bank said lending interest rates will remain stable for at least one year and could fall further.

State Bank of Vietnam Governor Nguyen Van Binh said even though the goal to keep borrowing costs stable will depend on inflation, he can assure that rates will not exceed 15 percent over the next year.

Binh made the statement during a meeting with business executives in Hanoi last Friday.

The central bank earlier this month told commercial lenders to reduce rates on existing loans to a maximum of 15 percent.

Local businesses, however, are still skeptical about the policy, complaining that many banks still refuse to lower the interest rates on current loans.

Tran Anh Vuong, vice chairman of the Hanoi Young Business Association, said most of the 650 member companies of his association have not been informed of any rate cut from their banks. He then aked Governor Binh whether there is any legal basis to force lenders to reduce interest rates on outstanding loans.

Binh admitted that the new policy is simply a request from the central bank but lenders cannot be "irresponsible." He said most local banks have implemented the policy, promising to release more information later.

Last week Deputy Governor Le Minh Hung told Thanh Nien that the State Bank will make sure commercial lenders take its order seriously and cut lending rates on existing loans to below 15 percent.

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