Commercial banks in Vietnam have been rushing to raise interest rates for deposits in both dong and U.S. dollars since early November to attract more capital to meet loan demand that tend to increase by the end of 2009.
The highest dong savings interest rate is 9.99% per annum at the moment since the central bank announced to conduct comprehensive supervision on any bank offering deposit rates of more than 10% per year.
On November 4, Saigon Commercial Joint Stock Bank (SCB) announced to increase its mobilization interest rates on U.S. dollars, gold, and dong. The Ho Chi Minh City-based lender offered rates at 9.7% per annum for one-month and 9.99% for six-month dong deposits
Meanwhile, the U.S. dollar saving rate was adjusted up by 0.1-0.65%/year for all terms except 60-month term. The highest increase of 0.65% is for 12 and 13-month terms.
From November 3, Viet A Commercial JS Bank (VietABank) increased saving rate of US dollar averaging by 0.1-0.3% per annum whereby one-month term is at 2.1%/year, three months 2.7%, six months 3%, nine months 3.2%, 12 months 3.4%, 18 months 3.45% and 36 months at 3.6%/year.
Unofficial statistics recently showed that the total deposit balance of customers at credit institutions by the end of October 2009 was nearly VND1.7 trillion, up 1.85% over the last month and up 25.72% compared to last December.
In particular, total deposits in dong was at over VND1.342 trillion, up 2.07% on-month and rising 30.51% compared to last Dec and total deposits in foreign currency was VND347.950 billion, up 1.0% over the previous month and up 10.14% compared to last Dec.
The State Bank of Vietnam is now calling on local commercial banks to balance short-term deposits and long-term credit in Vietnamese dong to underwrite operational safety, warning a possible dong shortages.
Dong shortages at local banks will prove a strain during the New Year and Tet periods with massive withdrawals totaling VND32 trillion (US$1.7 billion) from deposit accounts expected. (Saigon Marketing)
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