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Interest rates go down, but businesses’ worries not lifted yet
The ceiling deposit interest rate has decreased by one percent from 14 percent to 13 percent per annum since March 13, which means that businesses can expect the lending interest rate reductions in some days. However, businesses keep emotionless when receiving the good news.
Waiting in fear
Vu Thi Thuan, Chair of Traphaco, a pharmacy company, said that it’s too early to say that the lending interest rates will go down.
Thuan said that of her two enterprises, only Traphaco, which has good business records, can access the bank loans with the preferential interest rate of 17 percent per annum. Meanwhile, the other medicine production company, which has smaller business scale, located in Hung Yen province, still has to pay the high interest rate of 19 percent per annum.
In fact, businesses would feel lucky if they can borrow money at 19 percent. Meanwhile, other businesses cannot borrow capital, or have to pay the interest rates of over 20 percent.
“The previous ceiling deposit interest rate was 14 percent, while the lowest lending interest rate was 17 percent. However, the deposit interest rate has been eased to 13 percent. Will the lending interest rate go down to 16 percent?” Thuan questioned.
At present, analysts still keep cautious when talking about the interest rate policy. In 2011, banks complained that it was very difficult to mobilize capital with the interest rate of 14 percent in the context of high inflation. Now, with the interest rate down to 13 percent, it would be even more difficult to seek capital.
This means that banks would not have much money to lend. Therefore, businesses have every reason to worry that the lending interest rates would not go down as expected.
Thuan also said that the high inflation rate is still a big worry. Traphaco has to keep the sale prices unchanged or lower the prices slowly because of the slow sales. The high inflation rate has forced people to cut down spending.
“Will banks be able to mobilize capital from the public with the deposit interest rate reductions?” Thuan questioned. “It’s really a vicious circle.”
Meanwhile, the Hung Viet Trade Company, the developer of Golden Land Building project in Thanh Xuan district in Hanoi, keeps a more optimistic view about the future.
He said that the interest rate reduction, though it is modest, would help the real estate market warm up, because more people would seek to buy apartments when they believe that the market would be more bustling by the end of the year.
He went on to say that the company’s sale program to explore the market has attracted a high number of interested people, who came to see the sample apartment. Meanwhile, a lot of polled people said if banks and the investor have reasonable interest rate policies, they would borrow money to buy apartments.
There are two groups of clients. The first group of clients still does not have enough money, while the other has money, but they would only buy houses when they can see more good news.
Le Chi Hieu, President of the Thu Duc Housing Development, Deputy Chair of the HCM City, shares the same view with analysts that the lower deposit interest rate would prompt investors to pour their money into other investment channels, such as real estate, stocks instead of depositing money at banks. This would lead to the more bustling real estate market. Besides, the lower interest rates would help real estate developers push up their sales.
However, Hieu still keeps cautious when talking about the prospects of real estate firms. He said that the interest rate decrease is too small and make nothing if compared with the businesses’ capital thirst. Meanwhile, businesses are not sure that they can get loans at this moment.
Nguyen Nga – Manh Ha
vietnamnet
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