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Weekly information on banking activities (Oct 29-Nov 05, 2010)
1. Mobilizing and lending rates:
The State Bank of Vietnam (SBV) raised interest rates by 1% p.a from November 5, 2010 (The base interest rate and the refinancing interest rate raised to 9% p.a from 8% p.a, and the discount rate increased to 7% p.a from 6% p.a) in order to control inflation, and balance the VND and USD interest rates to prevent the converting of VND deposits to USD deposits. Accordingly, the inter-bank interest rates increased 0.5 – 1.5 percentage points as compared to the early week, to 12-13.5% p.a., however, the outstanding deposits of credit institutions in SBV met the demand of the compulsory reserve requirement and the liquidity.
The mobilizing and lending rates were stable. Credit institutions have not adjusted the mobilizing and lending rates after SBV increased interest rates. The interest rates were as follows:
- The VND interest rates:
+ The mobilizing rates were at 3% p.a for demand term, 7-10.8% p.a for below 1 month term, 11% p.a for 1 – 12 month terms and 10.5-11% p.a for over 12 month terms.
+ The lending rates were commonly at 10.5-12.3% p.a for priority areas (Agricultural and rural development and export), 12.5-15.5% p.a for ordinary production and business, 16-18% p.a for personal loans.
- The USD interest rates:
+ The mobilizing rates were at 0.2-0.5% p.a for demand term, 3.5-4.2% p.a for below 1 month term, 3.7-5.2% p.a for 3 -12 month terms and 4.2-5.6% p.a for over 12 month terms. The mobilizing rate of economic organisations was commonly at 1% p.a.
+ The lending rates were commonly at 5.5-6.5% p.a for short terms and 6-8% p.a for medium and long terms.
The specific mobilizing rates were as follows:
|
The quoted mobilizing rates |
Currency |
Demand
(% p.a.) |
Below 1month
(%p.a) |
3 months
(% p.a.) |
6 months
(% p.a.) |
12 months
(% p.a.) |
Above
12 months
(% p.a.) |
|
Group of state- owned commercial banks |
VND |
2.4–3.0 |
7.0-7.5 |
11.0 |
11.0 |
11.0 |
10.5-11 |
|
USD (Applicable to economic institutions) |
0.2-0.3 |
1.0 |
1.0 |
1.0 |
1.0 |
1.0 |
|
USD (Applicable to individuals) |
0.2-0.3 |
3.5-3.7 |
3.7-3.9 |
4.0-4.5 |
4.4-4.8 |
4.2-4.7 |
|
Group of joint-stock commercial banks |
VND |
2.4-4.2 |
9.0-10.8 |
10.8-11.0 |
10.9-11.0 |
10.95-11.0 |
10.5-11.0 |
|
USD (Applicable to economic institutions) |
0.2-0.5 |
1.0 |
1.0 |
1.0 |
1.0 |
1.0 |
|
USD (Applicable to individuals) |
0.25-1.0 |
3.6-4.2 |
3.9-5.0 |
4.0-5.1 |
4.2-5.2 |
4.5-5.6 |
The specific lending rates in VND and USD were as follows:
|
The average lending rates |
Currency |
Short term (% p.a.) |
Medium & long terms (% p.a.) |
|
Group of state- owned commercial banks |
VND |
Ordinary loans |
12.3-14 |
13.5-14.5 |
|
Loans for agricultural production and export |
10.5-12.3 |
12.5-13.5 |
|
USD |
|
5.5-6.0 |
6.0-7.0 |
|
Group of joint-stock commercial banks |
VND
|
Ordinary loans |
13-14.5 |
14-15.5 |
|
Loans for agricultural production and export |
11.5-13 |
13-14 |
|
USD |
|
5.5-6.5 |
6.5-8.0 |
3. Transactions turnover:
The total amount of transactions in the inter-bank market reached about VND 108,758 billion and USD 3,493 million, i.e. VND 21,752 billion and USD 699 million per day averagely.
Most transactions in VND were short terms (Overnight, 1 and 2 weeks), of which the amount of overnight transactions in VND was 39,755 billion, accounting for 37% of the total amount of transactions in VND. The amount of overnight transactions in USD was 2,210 million, accounting for 63% of the total amount of USD transactions.
4. Interest rates:
For the rates in VND, the average VND interbank interest rate for most terms increased, of which the rates for demand term slightly rose. The rates for below 1 month and 6 month terms increased by 0.47 and 0.65 percentage points respectively. The average rates for 3 month and 12 month term decreased by 0.20 percentage point and 0.91 percentage point respectively.
The average overnight rate was 8.64% p.a. The rate for 1 week and 2 weeks were around 10% p.a. The 6 month rate was at 11.53% p.a. The other rates were around 10.5% p.a. The highest lending rate was 12% p.a. while the lowest rate was 6% p.a. (Excluding the demand loan rate).
For the rates in USD, the average interest rates in USD decreased for most terms; in which the rates declined by 0.14-0.2 percentage point for below 1 month terms; by 0.84 percentage point (to 0.66% p.a) for 3 month term; and by 0.36 percentage point for 12 month term. The rate for 6 month term slightly rose by 0.17 percentage point. There was no transaction in USD for demand loans.
The average interest rates in the inter-bank market were as follows (% p.a.):
|
Term |
Overnight |
1 week |
2 weeks |
1 month |
3 months |
6 months |
12 months |
Demand |
|
VND |
8.64 |
9.87 |
10.02 |
10.57 |
10.30 |
11.53 |
10.67 |
2.07 |
|
USD |
0.37 |
0.53 |
0.63 |
0.58 |
0.66 |
1.33 |
1.87 |
- |
5. Exchange rate
Over the past few weeks, the foreign exchange market has shown some signs of tension as a result of the psychological concern of the foreign exchange demand for goods importation and possible high inflation at year end. However, the Ministry of Industry and Trade has just announced the estimated trade deficit of USD 12 billion for the whole year of 2010, lower than the previous forecast figure of USD 13.5 billion.
Based on the SBV statistics and forecasts, the pressure on the foreign currency demand will be lessened thanks to the Government’s control of trade deficit and the upward trend of foreign currency supply during the last months of 2010, since many big foreign currency loans of economic institutions have been and will be disbursed and the foreign investment and overseas Vietnamese remittance inflow has been significantly improved. Consequently, Vietnam’s 2010 international balance of payment is forecasted to be in equilibrium.
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