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Changes of interest rates in Vietnamese money market
It is reported by the Monetary Policy Department of the State Bank of Vietnam (SBV) that both lending and deposit rates in the domestic money market have tended to decline since the State Bank of Vietnam made several decisions in relation to interest rates.
SBV on October 20th 2008 cut the VND-denominated prime interest rate to 13% from 14%, lowered the refinancing rate to 14% from 15%, discount rate from 13% to 12%, hiked yield of reserve requirement level applicable to credit institutions from 5% to 10%. In addition, SBV made Decision No.2317/QD-NHNN on the prepayment of the compulsory SBV bills.
The report shows that the maximum VND lending rate in the market has fallen from 21% p.a to below 19.5% p.a.. Following are the rates quoted by state-owned and joint-stock commercial banks in the market:
The Vietnam Bank for Agriculture and Rural Development (VBARD) has quoted its short-term maximum lending rate of 18.5% p.a. to ordinary borrowers, and the rate of 16.8% p.a. for customers in production, export and other priority policy-based sectors. Whilst the rates of 18.5% p.a. and 17.8% p.a. have been quoted by the Vietnam Bank for Industry and Trade (VietinBank) and the rates of 18.5% and 17.2% by the Bank for Foreign Trade of Vietnam (VietComBank). The maximum lending rate of the Mekong Housing Bank (MHB) is 18.5% p.a.. The Bank for Investment and Development of Vietnam (BIDV) has offered the maximum of 19% p.a. for its long-term and 17.2% p.a. for short-term loans.
In the mean time, joint-stock commercial banks have reduced their maximum lending rate to below 19.5% p.a. and applied the rates between 18.5% to 19% p.a. to their priority customers.
As far as deposit rates are concerned, several commercial banks have slashed their deposit rates by around 0.3% to 0.7% p.a. for different terms.
In the inter-bank market, the overnight rate has declined from 13% p.a. down to 11% p.a., and liquidity of credit institutions has substantially improved.
SBV
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