HANOI, May 23 (Reuters): Vietnam's central bank will cut its refinance rate by 50 basis points to 5.0%, effective from Thursday, the government said on Tuesday.
The central bank, formally known as the State Bank of Vietnam (SBV), will also cut overnight electronic interbank rate to 5.5% from 6.0%, while keeping the key discount rate unchanged at 3.5%, according to a statement published on the online government portal.
SBV had not yet issued a statement as of 1232 GMT.
It is the SBV's third round of cuts since mid-March when it became one of the few central banks to buck the global monetary tightening cycle, in a bid to support growth.
The Southeast Asian country is trying to avert a slowdown in growth from weak demand in its key markets, after first quarter gross domestic product (GDP) expansion slowed to 3.3% from 5.9% in the fourth quarter last year.
"The measure aims at allowing commercial banks to lower lending rates, therefore supporting the economy and accelerating growth," the government said in the statement.
The central bank last cut its refinance rate to 5.5% from 6.0% on April 3, and its discount rate to 3.5% from 4.5% on March 15.
With the latest move, both the refinance rate and the overnight rate will have been cut twice since March.
Cutting the refinance rate lowers lenders' costs to obtain short-term loans from the central bank, thus supporting their lending operations to struggling firms.
Lower global demand for goods manufactured in Vietnam, regulatory reforms and a wide anti-corruption crackdown have contributed to tighter credit for firms, especially in the real estate sector.
The central bank earlier this month had hinted at the fresh rate cuts. - Reuters