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Banks interest rate cuts rapid-fire
Commercial banks’ continued interest rate cuts have forced the average deposit VND interest rates down to 17.3-18% per annum for 3-month term loans and US$ rates to less than 6% per annum. The gold interest rate is now hovering around 4% per annum.
Viet A Bank’s sharpest decrease can be seen in one-week term loans, from 17.2% to 15.8% per annum, while the rates have decreased by 1.4% and 1.3% for two-week and three-week term loans. The rates for 1- and 2-month term loans have decreased by 0.2% per annum. The bank is now only offering bonus interest rates for those who deposit VND100mil or more, while the bonus interest rates were once given to those who deposited over VND50mil.
Eximbank, for the second time in the last week, announced interest rate cuts. On September 22, it slashed interest rates by 0.4-2.34% per annum, while this time it has announced cuts on all terms of deposits (1-13 month). The rates for 1-4-month term deposits have dropped from 17.58% to 16.404-17.304%, while 6-8-month term deposits to 15.6-15.996%, and 9-15-month term to 15%, and 13-month term to 14.64% per annum.
Eximbank’s leaders said that the bank anticipated the CPI increase slowdown in September; therefore, it decided to cut the rates in advance.
At Vietcombank, 12-, 18- and 24-month term deposits now have the interest rates of 16.8%, 12.84% and 12.6%, respectively. SCB’s rates for 3-5-day term deposits have decreased from 8.4% to 4.8%, while over-5-day deposits, from 9% to 5%.
VP Bank is offering sharper interest rate cuts of 0.7-3.7%, while week-term deposit interest rates have decreased to 9.8-11.8% from 15%. Meanwhile, HD Bank has announced cuts of 0.2-0.6% per annum. The highest interest rate is now 18.3% instead of 18.6% as previously.
Some commercial banks, fearing risks, have nearly stopped accepting long-term deposits with high interest rates or have reduced interest rates sharply on these kinds of deposits. It is expected that in 2009, when the CPI increase slows down, the State Bank will surely cut the basic interest rate, which also means that the ceiling lending interest rate will be forced down. If banks continue mobilising long-term capital at high interest rates, they will suffer if they have to lend at lower rates.
Banks have also slashed deposit interest rates on US$ and gold deposits. As for US$ deposits, Viet A Bank has announced the cut of 0.4% on 1-12 month term deposits and 0.3% on over 12 month, while Orient Bank has announced the cut of 0.1-0.4%, Dong A 0.01-0.14%, SCB 0.1-0.3%.
As for gold deposits, Viet A has slashed interest rates by 0.2-0.6%, while Dong A 0.24-0.6%.
Experts say that the cuts are just the beginning of a new wave of deposit interest rate cuts which will help create new interest rate ground.
VNN
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