HANOI, July 10 (Xinhua) -- Vietnam's credit institutions are facing difficulties in slashing annual lending interest rates by 0.25-0.5 percentage points upon the central bank's latest request, local media reported on Monday.
The request, unexpectedly announced at the weekend, aims to provide local businesses in priority sectors with better access to loans, hence boosting economic growth, daily newspaper Tien Phong (Pioneer) quoted Deputy Prime Minister Vuong Dinh Hue as saying.
"Banks can hardly lower lending rate at this time. They will have to suffer considerable benefit losses," a local banker said.
As of late June, total deposits in the Vietnamese credit system rose 5.9 percent year-on-year, much lower than the 7.54 percent of loan growth. The loan growth was the highest level over the past six years, said the country's General Statistics Office.
Bank loans are the most important source of capital for Vietnam's economy. Currently, popular lending interest rates are 6-9 percent per year for short term and 9-11 percent for medium- and long terms, according to the country's Finance Ministry.
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