Easing inflation has allowed Vietnam central bank to cut rates earlier this year

EASING inflation has allowed Vietnam’s central bank to cut interest rates earlier this year, governor Nguyen Thi Hong said on Thursday (Jun 1).

The State Bank of Vietnam will prioritise macroeconomic stability and safety of the country’s banking system, she said in a speech to parliament.

“The central bank will stick to its strategy of maintaining macro stability, while closely monitoring the real-time situation to have appropriate and flexible measures,” Hong said.

The central bank last week cut its refinance rate by another 50 basis points to 5.0 per cent, its third round of cuts so far this year, as the country tries to avert a slowdown in growth from weak demand in its key export markets.

Vietnam’s gross domestic product growth in the first quarter of 2023 slowed to 3.3 per cent from an expansion of 5.9 per cent in the fourth quarter of last year.

The country’s average consumer prices in the first five months of this year rose 3.55 per cent from a year earlier. The government is targeting average inflation of 4.5 per cent for this year. REUTERS