Current laws do not stipulate the ceiling deposit interest rate, just the ceiling interest rate in general, which is understood as the maximum lending interest rate. It is calculated as 150 percent of the basic interest rate announced by SBV.

On December 2, 2009, SBV released Document No. 9484 to stabilize the monetary market. The decree ordered commercial banks to mobilize capital at interest rates of less than 10.5 percent per year. SBV also threatened to conduct inspection tours of banks offering overly high interest rates.

Afterwards, many commercial banks with deposit interest rates of 10.5 percent hurried to lower them to 10.499 percent.

As a result, all commercial banks now offer the same interest rate, no matter if the deposits are short, medium or long-term.

The central bank once made a similar move to stabilize the monetary market on February 26, 2008. At that time SBV limited the mobilization of capital at no more than 12 percent per annum.

Nowadays banks have every reason to hope that the deposit interest rate ceiling will be removed. Once the ceiling lending interest rate scheme ends, the ceiling deposit interest rate will no longer have any significance.

Commercial banks argue that they need enough autonomy to take initiative in their businesses. Financial analysts believe that it is understandable for SBV maintain the ceiling deposit interest rate of 10.5 percent per annum, which will serve as a safety-line that banks can use to define reasonable profit margins.

According to the latest SBV report, the banking system’s liquidity has improved with usable capital in excess. Some big banks have restructured their interest rate policies rather than keeping the same interest rate for all kinds of deposits.

Open market statistics also provide noteworthy information. Before Tet, SBV pumped 12-15 trillion dong a day through the open market operation (OMO). Meanwhile, in the last week, the volume of capital pumped thought OMO decreased significantly. On March 3, the figure was 10 trillion dong, while the figures were just 3.2 trillion dong for March 4 and 3.13 trillion dong on March 5. On March 8, only SBV issued just 2.3 trillion dong though OMO.

SBV also reports that the interbank interest rate also decreased sharply by 0.04-3.34 percent last week compared with the previous week. The average interest rate of short-term loans (overnight loans, one week loans) declined 3.64 and 2.08 percent per annum respectively.

VNBA observed that, as liquidity has improved, banks will not mobilize capital at any cost. If the 10.5 ceiling interest rate is removed, deposit interest rates will increase to higher levels, but financial experts predict they will not be too high.