The State Bank of Vietnam reduced the refinancing rate from 5 percent to 4.5 percent and the discount rate cut from 3.5 percent to 3 percent.

The dong deposit rate cap for terms of one to six months has been reduced from 4.75 percent to 4.25 percent.

It is part of the government’s efforts to "help businesses overcome difficulties and ensure social security amid the Covid-19 pandemic," the central bank said.

Vietnam’s garment, timber and seafood exporters have reported a slump in global demand in the last two months. The aviation, travel and food industries have also struggled due to travel restrictions and social distancing.

Prime Minister Nguyen Xuan Phuc has announced a new GDP growth target of 5 percent this year, much lower than the 6.8 percent set earlier. The International Monetary Fund has forecast growth of 2.7 percent.