A bank teller counts money at a transaction office in Hanoi. The average deposit interest rates have increased to 6.9-7.4 per cent per year for terms more than 24 months. Photo cafef.vn

 

 Interest rates for Vietnamese đồng-denominated for long term deposits at commercial banks have reached 7.4 per cent per year, according to the State Bank of Vietnam (SBV).

 

Under a recent report on deposit and lending interest rates of commercial banks, the SBV said the average deposit interest rates have increased to 6.9-7.4 per cent a year for terms more than 24 months.

 

Meanwhile, the rates for terms from 12 months to 24 months and from 6 months to 12 months are 5.5-6.2 per cent and 4.4-4.8 per cent per year, respectively.

 

For short-term deposits, the rate is 2.4-3.4 per cent per year for terms from one month to less than six months and 0.2 per cent for less than one month.

 

As for lending interest rates, the average lending interest rate of domestic commercial banks for both new and existing loans is in the range of 6.9-9.3 per cent per year, of which the rate for short-term loans is 4.1-5.0 per cent per year and 6.3-7.4 per cent per year for medium and long term.

 

The average short-term lending interest rate for priority sectors is about 3.6 per cent per year, lower than the 4 per cent short-term lending interest rate cap prescribed by the SBV.

 

In the interbank market, the overnight interest rate is at 4.5 per cent per year, while the rates for terms of one-week, two-week, and one-month are 4.57, 4.52 and 4.79 per cent per year, respectively.

 

Since the beginning of the second half of this year, many banks have increased deposit interest rates significantly.

 

Experts forecast deposit interest rates will increase further in the context of increasing inflationary pressure from the third quarter of this year.

 

The expected recovery in credit demand thanks to positive prospects for the manufacturing industry and export activities will also lead to banks' need to raise capital, which will cause deposit interest rates to continually increase at the end of the year.

 

Vietcombank Securities Company (VCBS) forecasts that deposit interest rates in the third quarter of 2024 will continue to increase by about 0.3-0.5 percentage points. The rising pressure may continue in the fourth quarter, pushing the rate up by 0.5-1 percentage point for the whole year.

 

Banking expert Nguyễn Trí Hiếu said economic growth is stronger and individuals and enterprises are borrowing more from banks. This will push up the credit demand so banks are tending to increase interest rates to attract deposits to meet customers' capital needs. — VNS

 

Read original article here