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Central bank lifts overnight loan rate to 15 percent
Vietnam’s central bank has lifted its interest rate on overnight loans to 15 percent per year from 10.8 percent, raising lenders’ short-term borrowing costs.
The new rate was for loans settled via the interbank electronic payment system from Tuesday, Deputy Governor Nguyen Dong Tien said in a directive seen by Reuters Wednesday.
The State Bank of Vietnam’s overnight rate for its overdraft facility, or loans to commercial banks, is now 0.0417 percent on a daily basis instead of 0.03 percent previously.
Interbank overnight rate fixings edged up to 15.42 percent Wednesday after banks received the central bank’s directive.
They were at 15.19 percent on both Tuesday and Monday.
“Earlier, banks could borrow from the central bank at an annualized rate of 10.8 (percent) but now that rate has been pushed up to 15 percent and that obviously means to discourage too much borrowing from the central bank,” said Prakriti Sofat, a HSBC economist.
Overnight loans, used by banks to ensure they have sufficient funds to balance their books, jumped to a record 40 percent on the interbank market in February after the central bank started a series of tightening measures to curb credit growth.
The rate has eased after the central bank increased its base rate in May and June, allowing banks to raise funds by offering higher rates on deposits.
Thanhnien
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