To catch up the State Bank of Vietnam (SBV)’s policy to mobilise gold from people via banks, some banks have started to increase the gold deposit interest rate.
At Nam A Commercial Joint Stock Bank (NamA Bank), the interest rate of certificate of deposit (C/Ds) in gold for 1-month term hit the highest of 4 percent per annum (p.a.), this is also the highest level amongst gold mobilising banks.
Earlier, on February 16, Asia Commercial Joint Stock Bank (ACB) and Vietnam Export Import Commercial Joint Stock Bank (Eximbank-EIB) also raised the gold saving interest rate to 3 percent p.a. instead of 2.5 percent p.a. previously.
According to Le Tham Duong, Head of Business Administration Department, HCM City Banking University, the gold deposit rate increase is due to two factors. The first is to increase the amount of capital mobilisation as the gold deposit interest rate of only 3 percent is still cheaper than the dong.
Second, banks are still facing difficulties in liquidity and buying gold is a defensive strategy, as needed gold can be used as collateral to borrow on the interbank market. Besides, the current gold price is relatively stable so that people also have demand to send gold to get interest.