At the end of the session on September 6, the interbank interest rate for VND loans was 5.44 per cent per annum for an overnight term, only slightly lower than the last peak of 5.56 per cent per annum in February 2016. Liquidity in the system is still tight and interbank interest rates continue to increase despite the State Bank of Vietnam’s intervention.

Experts believe that because the management level has not withdrawn money through the open market channel, both interest rates and exchange rates on the interbank market have fallen sharply. Prolonged social distancing in Hanoi, Ho Chi Minh City, and other localities has also affected production and business activities, and demand for output credit has also gradually fallen, creating capital congestion in the system.

The credit risk in all fields rose at a slower rate in the first half of 2021 compared to the second half of 2020, according to the results of a credit trend survey of credit institutions conducted by the State Bank of Vietnam (SBV). The credit risk is, however, forecast to go up in the second half of this year due to uncertainty over the pandemic.