The decision will also slash the maximum lending interest rate of credit institutions from 18 percent to 16.5 percent.

The same day, the central bank decided to reduce the refinancing interest rate from 13 percent to 12 percent and the re-discount rate from 11 percent to 10 percent.

Overnight lending interest rate on the inter-bank market is down to 12 percent from 13 percent per year at present.

In another move, the SBV decided to decrease the compulsory reserves in Vietnamese dong for credit institutions by 2 percent.