Weekly Information on Banking Activities (Jan 15 – 21, 2011)

1. Mobilizing and lending rates:

- The VND interest rates:

+ The mobilizing rates in VND changed slightly as compared to the previous week, and were commonly quoted at 13.5% - 14% p.a.. Most credit institutions refrained from promotion programs with cash and interest rate bonus.

+ The lending rates for short terms were commonly 12.5% – 14.5% p.a for agricultural and rural development and exporters, 15-18% p.a for other productive and business enterprises, and 18-20% p.a for the non-productive sector.

- The USD interest rates:

+ The mobilizing rates were relatively stable as compared to the previous week. The common mobilizing rates were 0.2-0.5% p.a for demand deposits, 4.2-5.8% p.a for below 12- month deposits, and 4.5-6.0% p.a for over 12- month deposits. The highest interest rate was 6.24% p.a for 12 month term quoted by the Nam Viet Joint-Stock Commercial Bank.

+ The lending rates rose by 0.3-0.5 percentage points p.a as compared to the previous week. The lending rates were commonly 5.6-6.6% p.a for short terms, and 6.2-8% p.a for medium and long terms.

The specific mobilizing and lending rates were as follows:

2. Transactions turnover :

According to the express reports of commercial banks by January 19, the total amount of transactions in the inter-bank market reached about VND 131,655 billion and USD 3,004 million, i.e. VND 26,331 billion and USD 601 million per day averagely. 

Most transactions in VND were overnight and 1 week terms. The amount of overnight and 1 week transactions in VND accounted for 73% of the total amount of VND transactions. The amount of overnight transactions in USD reached 1,332 million, accounting for 44% of the total amount of USD transactions.

3. The average inter- bank interest rates:

The interest rates by January 19 were as follows:

- For the rates in VND, the average VND interbank interest rates registered a slight decrease of 0.02 – 0.08 percentage points p.a for several terms (Overnight, 1 week and 3 month terms). The average rates for other terms increased by 0.16 – 0.46 percentage points p.a.

The average overnight interest rate was 11.31% p.a, down by 0.08 percentage point p.a as compared to the previous week. The rates for over 1 week terms ranged between 13 – 13.5% p.a. The highest average rate was 16%. The lowest rate was 6% p.a (Excluding demand term).

- For the rates in USD, the average interest rates in USD for below 1 month terms were on upward trend as compared to the previous week. The rate for 1 month term remarkably declined to 1.16% p.a from 1.75% p.a (Down by 0.59 percentage point p.a). The rate for 3 month term increased to 2.45% p.a (Up by 1.05 percentage point p.a) as compared to the previous week. The average overnight rate was 0.34% p.a; the other rates ranged between 0.46% - 3.60% p.a. 

There were transactions for 6 month term  while there were no transactions for 12 month and demand terms.

The average interest rates in the inter-bank market were as follows (% p.a.):

4. Exchange rate        

The foreign exchange market continued to show positive signs. Commercial banks could buy foreign currencies from the market and sold them to their customers. In addition, the increasing foreign currency amount from important capital inflows of the balance of payment in the final months of the year contributed to enhancing the foreign currency supply in the market. According to report of the SBV Foreign Exchange Management Department , the foreign currency amount from overseas remittances and foreign investment into Vietnam increased rapidly. Along with the increase of cash inflow, policy measures to stabilize the foreign exchange market over the past period were the important factors to heighten the confidence of the market.

The VND/USD rates were commonly quoted by commercial banks at 19,495-19,500. The exchange rates in the parallel market were on the downward trend.

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