Vietnam's central bank now measures the deposit-rate cut on actual new deposits, not posted rates

Implications for lenders

Banks in Vietnam must lower the average rate on new deposits of six months or more by at least 0.5 percentage point a year against their own 11–20 October average, with credit quotas at stake. If banks comply, non-bank lenders funded by bank lines may see cheaper funding later in the year, but there is no minimum lending-rate cut, so pass-through may differ by bank. Lenders that rely on deposit funding may need to watch outflows to competitors whose rates fall more slowly.

Implications

Facts

The dispatch: the State Bank of Vietnam (SBV) issued Official Dispatch No. 9736/NHNN-CSTT on 21 October 2026, following the Governor's conclusions at a meeting with credit institutions on 19 October. It requires commercial banks to cut the average deposit rate on new transactions for terms of six months or longer by at least 0.5 percentage point a year ¹ in the last months of 2026, measured against each bank's own average for the reporting period from 11 October to 20 October 2026.

Monitoring and sanctions: the SBV will check compliance through rates on new transactions that banks already report under Dispatch No. 6194/NHNN-DBTK of 7 August 2023. Banks that do not comply face measures that may include a reduced credit growth target.

Lending rates: the dispatch tells banks to cut lending rates in substance on all sales channels, but sets no minimum. The earlier request to cut lending rates for production, business and priority sectors by 1.5–2 percentage points ² came from the Deputy Prime Minister's meeting on 16 October.

Analysis

Over one week the target has moved from posted prices to actual prices. Dispatch No. 9608/NHNN-CSTT of 18 October asked for a cut of at least 0.5 percentage point a year ³ in listed deposit rates; Dispatch No. 9736/NHNN-CSTT asks for the same size of cut in the average rate on new deposits, against a fixed ten-day baseline. That closes the gap between listed rates and the negotiated or promotional rates banks actually pay. The funding pressure is visible in the data: the average rate on new deposits reached 6.38% ⁴ on 20 September, up 1.15 percentage points from end-2025, while credit had grown 11.44% ⁵ since end-2025 by 14 October.

Vietnam has used this tool before: in July 2023 the SBV asked banks to cut lending rates by at least 1.5 percentage points a year ⁶. The 2026 version differs in two ways: the binding number is on the deposit side, and compliance is linked to each bank's credit quota.

Counterpoints and uncertainties

Banks that lose deposits after cutting rates may face liquidity strain while credit keeps growing, and some may shift to other funding such as interbank borrowing or valuable papers, which the dispatch does not cover. The baseline period from 11 October to 20 October may already include rates that banks raised in early October, so a cut from that level may still leave deposit costs high. How the SBV applies quota cuts bank by bank has not been published.