Interest rates in the inter-bank market are declining in contrast to previous years when the rate often increased significantly due to rising capital demand at end of the year.
On Tuesday, the average interest rate of short-term dong loans in the inter-bank market continued to decrease by 0.04-0.26 percentage points against Monday. Accordingly, the overnight rate plummeted to 1.88 per cent per year; one-week rate, 2.38 per cent; two-week, 3.08 per cent and one month, 3.68 per cent.
The rate also dropped sharply last week. Specifically, closing the last session of the week, the dong overnight interest rate was traded around 2.3 per cent per annum, down by 1.4 percentage points; while one-week rate was 2.73 per cent per annum, down by 1.05 percentage points; two-week rate was 3.21 per cent per annum, down by 0.74 percentage point; and one-month rate was 3.8 per cent per annum, down by 0.28 percentage point compared to the end of the previous week.
It was unusual, as the interest rate in the interbank market in the same period last year doubled, reaching 4.6-5 per cent per year.
According to analysts from Saigon Securities Incorporation, the drop in the rate on the interbank market was thanks to abundant capital source from large commercial banks.
Meanwhile, interest rates listed at commercial banks to lure idle money from individuals and institutions, have remained unchanged. The rate averages some 4.1-5 per cent per year for deposits with terms of less than 6 months, 5.5-7.5 per cent per year for 6-12 month deposits and 6.4-7.9 per cent per year for 13-month deposits.
SSI analysts said interest rates for terms of more than six months are still high, so deposits of commercial banks have grown well in the last four months, helping the banks increase the ratio of medium and long-term deposits.
After the Lunar New Year holiday, which falls on January 26 next year, deposit interest rates could inch down, the analysts forecast.
http://bizhub.vn/banking/abundant-capital-source-drives-rates-in-inter-bank-market-down_312139.html
