VND Overnight Interest Rates Soar to 43 per cent
The race to hike Vietnam dong interest rates after Lunar New Year festival has pushed interest rates of domestic currency in the inter-bank market to 43 per cent, the highest so far.
Although overnight interest rates are often not announced publicly, the recorded 43 per cent rate was confirmed by many banks in morning February 20.
The sudden increase of VND interest rate is resulted from local banks’ races to raise rates to boost deposits and lure customers.
Vietnam Commercial Bank for Private Enterprises (VPBank) February 18 raised interest rate by 0.6 per cent-1.02 per cent to 10.5 per cent a year, becoming the bank with the highest deposit interest rate in Vietnam.
This peak was broken by Southeast Asia Commercial Joint Stock Bank (SeABank) after the bank increased the 12-month deposit interest rate to 10.68 per cent a year February 19.
An Binh Joint Stock Bank (ABBank) has also hiked VND interest rates between 0.18 per cent and 1.2 per cent a year, after adjusting the rate up to 9.12 per cent a year in early February.
Over the past 20 days, Saigon Commercial Joint Stock Bank (SCB) increased deposit interest rates for domestic currency four times, and the rate for 12-month term hit 10.56 per cent a year.
Some others banks have also pushed up deposit rates, such as Southern Bank and SHB.
Analysts said banks will not stop the interest rate race here.
Early this week, Vietnam Bank Association and member banks have to hold a seminar in Hanoi to discuss issues related to interest rates and measures to rein inflation. They proposed having an interest rate frame so that banks can control others. (Dantri, VietnamNet)
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