Saturday, May 25, 2024 1:54:16 AM - Markets open
VN-INDEX 1,261.93 -19.10/-1.49%
HNX-INDEX 241.72 -5.19/-2.10%
UPCOM-INDEX 94.40 -0.77/-0.81%
Race to lower deposit interest rates to continue until year end
Vietnam News - 10/10/2023 2:04:08 PM
 (0 ratings. You must sign in to rate.)
 The race to lower deposit interest rates among banks is expected to continue until the end of 2023, according to analysts.
They attributed it to sluggish credit growth and challenges that lending continues to face, and loose monetary policy, leading to a surplus of liquidity.
Banks have been steadily reducing deposit interest rates since April and they have now gone below 5.5 per cent per year, even lower than during the COVID-19 pandemic period.
A few days ago, State giant Vietcombank continued to reduce its rates, which have gone to the lowest in years.
On October 7, its highest rate was 5.3 per cent, lower than the pandemic period, which it had been 5.8 per cent.
Three other State-owned banks, Agribank, BIDV and VietinBank, have capped the rate at 5.5 per cent.
Nguyễn Trí Hiếu, a banking expert, said deposit interest rates would continue to decrease this year though not to the same extent as before.
Dr Cấn Văn Lực, chief economist of BIDV, said policy interest rates should remain stable since further lowering is unnecessary.
Besides, reducing them further could put pressure on the exchange rate, he pointed out.
In a recent report the World Bank claimed there was not much room left for Việt Nam to loosen monetary policy.
Credit demand continues to be low though interest rates have plummeted, and further cuts are unlikely to promote credit growth, it claimed further.
Dr Trần Hùng Sơn, a lecturer at HCM City National University’s University of Economics and Law, warned that reducing interest rates too quickly would widen the difference between domestic and international interest rates, especially dollar-denominated ones.
As the gap widens, pressure on the foreign exchange rate would be inevitable, he added.
Peter Verhoeven, chairman of Prometheus Asia SDN BHD, said while Việt Nam is loosening its monetary policy unlike the US or the EU, the move is appropriate since it has controlled inflation well.
The steady deposit rate cuts are expected to further bring down lending rates since the SBV has been exhorting lenders for long to reduce them to support businesses.
Industry experts forecast a bleak outlook for the banking industry this year due to stagnant credit growth and falling profits, with smaller players in particular expected to face a sharp drop in profit growth. — VNS
Read original article here
Newer News
22/05 Finance ministry works with S&P on sovereign credit rating
13/05 Central bank's bid to stabilise gold market hits snag
08/05 Proposal of compulsory non-cash payment for gold transactions controversy
08/05 Three bidders win gold auction at high price
06/05 Bank deposits decline for first time in over two years
06/05 SJC gold price hits all-time high
24/04 Two bidders win the first gold auction this year
24/04 HCM City seeks to draw remittances in infrastructure
24/04 HCM City could issue bonds for overseas Vietnamese to fund infrastructure: conference
19/04 Overseas remittances to HCM City record highest increase in three years
Older News
25/09 Corporate bond market focuses more on quality
11/09 Banks made big profits from foreign exchange business
09/09 Borrowers benefit from new lending policy
06/09 Low credit growth, reducing profit put pressure on bank prospects in 2023
06/09 Bank loans to real estate business rise in H1 2023
25/08 SBV fixes law in favour of economic growth
25/08 Private bond market grows stably after first month operation
22/08 Experts propose to cut interest rates of loans for social housing developers and buyers
19/08 Economic difficulties cause gold demand to drop sharply
15/08 SHB increases charter capital to nearly US$1.51 billion
Newsletter Signup
Top Stories
VN adds over 110,000 new securities accounts in April, bringing total to 7.7 million
Cautious rise amid low supply and cash flow, investors advised to monitor resistance area
Interest rates to rise but not have major impact on stock market: economist
Businesses concerned about rising exchange rate pressure
Gold bar auction to be resumed after 11 years of suspension
Market Update
Last updated at 3:05:01 PM
VN-INDEX 1,261.93 -19.10/-1.49%
Real-time chart
Top 5 Actives
Top 5 Gainers
Top 5 Losers
My Favorite Quotes
Your most recently viewed tickers will automatically show up here if you type a ticker in the Get Quotes box on the top of the page.
Company Research
Type in the symbol above for thorough background information, key statistics and financial information.
Stock Sectors
We continuously improve our services, here are the latest updates...
Allow you to monitor a customised group of securities. You can set up multiple Portfolios to help you better manage your investments.
Trigger Alerts
Get up-to-date alerts delivered directly to your email address.
Stock Screener
Allow you to filter the market and find exactly what sort of company you are looking for.
Live Terminal
Get instant access to FREE REAL-TIME streaming quotes for hundreds of stocks from HOSE, HNX and UPCOM exchanges.