Vietnam's central bank will tell lenders to reduce their interest rates in a bid to support business and boost economic growth, Prime Minister Nguyen Tan Dung said in a statement on the government's website.
The move is part of the government's effort "to ensure macro-economic stability with a restrained inflation rate and an economic expansion of about 6.5 percent," the prime minister said. The State Bank of Vietnam is requested "to flexibly use" suitable tools to "gradually bring down the level of the market's interest rates," he said, without elaborating.
Vietnam's inflation accelerated to a one-year high in March, with consumer prices rising 9.46 percent from a year earlier, according to the General Statistics Office. Economic growth quickened to 5.83 percent in the first quarter after expanding 5.3 percent in 2009.
The government is also asking the finance, industry and trade, planning and investment ministries as well as provincial governments to join the State Bank and "concentrate" their efforts in order to curb inflation, boost exports to narrow the trade deficit and increase the nation's foreign-exchange reserves, according to the statement.
The government agencies need to work out measures to "create favorable conditions for companies to develop businesses" and help achieve the 6.5 percent growth target for the year, according to the statement.
Companies in Vietnam are delaying expansion plans due to high borrowing costs, Saigon Tiep Thi newspaper reported Wednesday, citing representatives at a number of industry groups. Lending rates have climbed to as high as 19 percent, it said, without giving a comparative figure.