Prime Minister Nguyen Tan Dung instructed the State Bank of Vietnam on Tuesday to continue its flexible monetary policy and bring down interest rates to ensure a 6.5 percent economic growth this year.
PM Dung said lending rates should be 12-13 percent a year and deposit rates 10 percent.
He asked the central bank lender to strengthen its control over foreign exchange rates and the monetary market to promote exports and restrict imports.
The government lifted limits on short-term lending rates this month after allowing banks to negotiate interest rates on medium and long term loans in February.
The Vietnam Bank Association has asked its members to keep deposit rates stable at around 11.5 percent so that lending rates can be lowered, the Vietnam Economic Times reported on Monday.
Stable deposit rates will help ensure benefits for both lenders and depositors, the association said. It also called for commercial banks to stop offering cash bonuses or gifts to customers.
Following the association's request, many banks cut dong deposit rates to 11.5 percent a year on Wednesday from up to 11.99 percent, local news website VietnamNet reported.