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Liquidity of banking system forecast to be abundant in Q4 2023
Credit institutions expect liquidity of the banking system will be abundant in the fourth quarter of 2023, and deposit and lending interest rates will continue to decrease.
Headquarters of the State Bank of Vietnam (SBV). The SBV’s latest survey shows credit institutions expect customer demand for banking services in 2023 to increase at a slower rate compared to 2022. — Photo sbv.gov.vn
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The forecast was based on a survey of business trends among credit institutions in the fourth quarter of 2023 released recently by the State Bank of Vietnam’s Department of Forecasting and Statistics.
According to credit institutions, the liquidity of the banking system in the third quarter of 2023 continued to maintain a good and improved status compared to the second quarter of 2023. Credit institutions predict that the liquidity situation will continue to be abundant in the fourth quarter of 2023 and for the whole year 2023 compared to 2022.
Credit institutions also expect the average deposit and lending interest rates in the banking system to continue to decrease by 0.26-0.35 percentage points in the fourth quarter of 2023.
As expected in the June 2023 survey, at this survey period, credit institutions said they continued to adjust and reduce the average price of their products and services. In general, compared to 2022, the average price of products and services in 2023 is forecast to decrease significantly, but may increase slightly in 2024 because service fees are expected to slightly increase while marginal interest rates are expected to continually decline.
The survey also showed capital mobilisation across the entire banking system is expected to increase by an average of 3.2 per cent in the fourth quarter of 2023 and increase by 8.7 per cent in the whole year, adjusted down compared to the 10.6 per cent expectation recorded in the previous survey. Outstanding loans of the banking system are expected to increase by 4.6 per cent in the fourth quarter of 2023 and increase by 12.3 per cent in 2023, adjusted down by 0.2 percentage points compared to the 12.5 per cent forecast in the previous survey.
According to the survey, credit institutions predict that customer demand for banking services may further improve in the fourth quarter of 2023 due to expectations of a more positive economic situation, and a gradual rebound of manufacturing and export sectors, in which loan demand is expected to improve more than deposit and payment demand.
For the whole of 2023, customer demand for banking services is forecast to increase at a slower rate compared to 2022.
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