The decline in interest rates of Vietnam in the period 2007- 2015 and recommendations

Abstract

Maintaining interest rates low and stable to help businesses reduce costs, thereby creating competitive advantages is the
goal of every country. With businesses and individuals, low-interest rate helps them improve production, increase income
and contributions to the State, therefore contributing to economic growth. There are many factors governing interest
rates in general, in which inflation is the most fundamental one. [1]
In the last decade, inflation in Vietnam has witnessed complex movements with large amplitude. Although the Government
and the State Bank of Vietnam (SBV) have always considered implementing various solutions to reduce lending interest
rates to support businesses, contributing to economic growth, but the results were not always as expected. State
intervention through monetary policy to reduce interest rates is necessary, yet it is important to respect the laws of nature
in order to avoid unexpected consequences. This article assesses the situation and recommendations for the orientation
of the central bank to cut interest rates in the near future