The Orient Commercial Bank (Oricombank) from July 20 will launch a programme called dong deposits secured in US dollar. Accordingly, dong depositors, if fearing over dong depreciation, can convert their dong deposits into US dollar according to the daily forex rate announced by the OCB.
Upon maturity, the bank will convert such US dollar equivalent deposits into dong based on the forex rate announced on the maturity date. The interest rate for 12-month terms is fixed at 4.5%.
Reportedly, facing up high increase in inflation, many people switch from dong to US dollar holdings. However US dollar deposit interest rates are often very low, that is some 3.5% a year at most.
Under the aforementioned programme, dong deposits will be entitled to another 1% interest rate compared to US dollar ones. Additionally, clients’ money is secured in US dollar despite sharp fluctuation of forex rates in the market.