Interest rate set to remain stable: SBV

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A bank teller counts money.

The interest rate will continue to be stable over the remaining months of the year, according to the State Bank of Việt Nam (SBV).

The move was made as there has been some concern about an interest rate hike coming soon.

SBV deputy governor, Nguyễn Thị Hồng, said though deposit interest rates increased slightly in the first months of the year, the lending interest rate remained relatively stable.

After rising by roughly 0.2-0.3 per cent per year in the first quarter, the interest rate has been adjusted down slightly since April, according to the SBV.

State-owned commercial banks and some joint stock commercial banks have adjusted down their lending rate by 0.5 per cent per year for short-term loans. The rate for medium- and long-term loans in production and business sectors has been also kept at a maximum of 10 per cent per year.

SBV affirmed that it would continuously instruct commercial banks to balance their mobilised capital source and lending capital source to stabilise deposit interest rates in the remaining months of the year.

Enhancing business performance and cutting input costs are also required to be able to lower lending rates.

According to some experts, interest rates will remain high and continue to rise slightly in the coming months.

Đầu tư (Vietnam Investment Review) quoted Prof Trần Du Lịch, a member of Advisory Council of National Monetary and Financial Policy, as saying that the interest rate is unlikely to decrease by the end of the year. The best option is to try to keep the interest rate at the current level.

Financial expert Huỳnh Trung Minh also says that deposit rates have increased since the first 2 quarters of the year and will not stop in the second half.

“With the current inflation rate, the real interest rate for depositors is positive and when inflation rises in the coming period, interest rates will move with the same trend,” Minh told Đầu tư.

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The increase of deposit rates has raised concern about a lending rate hike, despite the fact that banks are urging to promote credit demand by preferential interest rates.