State Bank of Vietnam (SBV) has reduced both policy rates (discount rate and refinancing rate) by 25bpsto 4.25% and 6.25%, respectively. The key questions are; 1. Why a rate cut? Does it boost consumer/corporate credit demand? Subdued inflation and market rates below policy corridor give the SBV room to cut rates. Considering prime corporate credit growth is at 6% and consumer credit growth at 21%, a 25bps rate cut would not impact credit uptake materially (Figure 1).