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Banks race to raise interest rates
Interbank interest rates on Monday rose sharply, hovering around 22 percent per year for one week term while saving interest rates are almost touching the ceiling.
The interbank interest rates for one-week term have jumped to 22 percent per year, up from 3percent from last week and rates for one-month term are now hovering around 23 ercent per year.
Meanwhile, to attract deposits, banks have also raised short-term interest rates for saving accounts as close to the ceiling of 14percent per year as they can.
At most banks, saving interest rates for 1-week to 3-week term are now 13.9 to 13.97 percent per year.
The State Bank of Vietnam said after shortly after it imposed the ceiling, many small banks started to offer bonuses or gifts illegally in an effort to outdo their rivals.
In the first quarter of this year, Vietnam dong deposits at banks fell by 4 percent due to exchange rate fluctuations while foreign currency deposits increased by 13.3 percent.
Lending in the first quarter also increased by 4.3 percent compared to the end of 2010, with dong loans increasing by 1.9 percent and foreign currency loans, by 10.7 percent.
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