Liquidity of the banking system has been plentiful again after the Lunar New Year (Tet), helping the central bank net withdraw more than 51.55 trillion VND (2.2 billion USD) in the past week.

 

According to a report from the Saigon Securities Inc (SSI), the good liquidity, which was thanks to the return of cash flow to the banking system after Tet, has helped interest rates of loans in the inter-bank market decrease at all terms to 4.52 percent per year for overnight loans and 4.64 percent for one-week loans.

 

"The peak period when capital demand was rising sharply a few weeks before Tet has passed, and interest rates in the inter-bank market will likely remain stable at 4-4.75 percent per year," SSI forecast.

 

According to the SSI report, deposit interest rates listed at commercial banks are also relatively stable, with a slight rise of 0.1-0.2 percentage points applied at some banks as promotional programmes in the early days of the new year to lure depositors.

 

Though the central bank has tightened credit growth this year, SSI said the probability of deposit interest rate declining is quite low and the rate would remain steady as banks would have to make bank savings to be attractive to be able to compete with other investment channels.

 

SSI also reported the gap in USD/VND interest rates has tended to narrow, but still maintained a good level of 1.8-2.0 percent.

 

It forecast the USD/VND exchange rate would be steady, with the dollar traded at 23,200 VND over the next few weeks.-VNS/VNA