Banks ignore Govt’s directive on interest rates

In contrast to the government’s directive and the State Bank of Vietnam’s expectations, deposit rates and lending in dong were not reduced quickly, but kept stable at high in August.

According to statistics from the Vietnam’s central bank, the dong deposit and lending rate flatform in August tended to be stable, in which interest rates in dong varied from 10.6 to 11.2 percent year, while short-term lending rates of the dong for the priority areas of agricultural sector, rural areas, exports and SMEs were common at 12 to 12.5 percent for state-owned commercial banks and from 12.5 to 13.5 percent per year for joint stock banks. The lending rate for business and production kept standing at 13-15 percent per year. Interest rates for securities and consumer loans were at 16-20 percent per year.

This ground was relatively contrast to the government’s directive to cut down both input and output interest rates quickly to support the business activities of enterprises.
Meanwhile in July, deposit rates declined by about 0.2 to 0.4 percent per year, and dong loan interest rates declined by about 0.5 to 1.5 percent per year.

On deposit and loan rates in US dollars in August, the State Bank of Vietnam said that these interest rates changed very little compared to July 2010.

Total deposits of customers at credit institutions by the end of August 2010 were estimated to have grown 17.75 percent compared to late 2009.

Total loans for the economy by the end of August were estimated to have increased 16.27 percent compared to late 2009.

Total means of payments by August, 2010 had grown 16.31 percent in 2009 compared to the end of 2009, in which the cash circulating outside the banking system increased 8.37 percent.

 

Category: Finance