December 22, 2012 / 1:20 AM / 5 years ago

Vietnam cuts key rates to boost growth

HANOI, Dec 22 (Reuters) - Vietnam’s central bank will cut its discount rate by one percentage point to 7 percent and lower the refinance rate to 9 percent from 10 percent to boost the country’s economic growth, it said in a statement.

It will also lower the ceiling on dong lending rates for agriculture, export and supporting industries to 12 percent from 13 percent and cut the dong deposit ceiling rate for terms ranging from one month to below 12 months to 8 percent from 9 percent, the State Bank of Vietnam said in the statement issued late on Friday.

The new rates, the sixth revision this year, will come into effect on Dec. 24.

“Production and business still face many difficulties due to the market’s low purchasing power, high stockpiles and limited fund absorbing ability of businesses,” the central bank said in the statement.

Vietnam’s economic growth will slow slightly to 5.1 percent this year, a government report said this month, slightly lower than an earlier estimate of 5.2 percent expansion. Gross domestic product increased 5.89 percent in 2011.

The central bank said annual inflation for this year would be 7 percent, in line with earlier government estimates.

Reporting by Hanoi Newsroom; Editing by Sanjeev Miglani

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