Exchange rates cannot be sacrificed for low interest rates, says deputy governor

Average deposit and lending rates down 0.15% and 0.25%, respectively, this year as of January 31.

Rates hit their lowest for two decades.

People buying houses worth less than VND2 billion ($84,000) may be eligible for interest rate support of 2 per cent.

The central bank has said it will closely monitor the operations of credit institutions.

The government has urged the central bank to quickly amend and supplement unsuitable regulations to boost disbursement from the package.

At a discussion session on October 28, many National Assembly (NA) deputies said it is necessary to adopt solutions to restore Vietnam’s corporate bond and securities markets as soon as possible, to ease the pressure on credit. In particular, the government needs to closely monitor interest rates at banks, so that sectors carrying out production and business can access credit at an appropriate cost.

After the State Bank of Vietnam (SBV) raised the ceiling interest rate for deposits under six months to 6 per cent per annum, many banks increased their rates from October 25. The highest is at SCB, at up to 9.3 per cent per annum. Analysts have forecast that interest rates will continue to increase over the closing months of the year due to exchange rate pressure and inflation.

Credit institutions continue to expect that deposit and lending interest rates will increase in the fourth quarter. A survey by the State Bank of Vietnam found that 59-61 per cent of credit institutions expect an average interest rate increase of 0.37 percentage points in the quarter.

According to FiinRatings, factors affecting the profits of securities companies include liquidity risk, proprietary trading, interest rates, and exchange rates.