The monetary market report of the week ended on June 21 of SSI Retail Research (SSI Retail Research) said that last week, the State Bank of Vietnam net withdrew 3.179 trillion dong mainly via treasury bills, pushing the number of circulating treasury bills to approximately 68 trillion dong.
Liquidity is still abundant, causing the interbank interest rates to drop by 5-17 basic points (bps) in short terms, currently at 3.1 percent per year with overnight rates and 3.28 percent per year with one-week term. In contrast, the rates of one-month and three-month term slightly increased by seven bps and two bps. The overnight interest rate difference of VND-USD decreased to 0.65 percent per year.
Deposit interest rates in market one remained stable at 4.1 percent -5.5 percent per year with terms of less than six months; 5.5-7.45 percent per year for terms of six to less than 12 months; and 6.4-7.8 percent per year with 12 and 13 month term, except for some banks with small market share that offer interest rates of above eight percent per year.
According to information from SBV, the ratio of short-term capital for medium and long-term loans at the end of April 2019 of state-owned commercial banks and joint-stock commercial banks was at 31 percent and 31.5 percent respectivelydown from the level of 31.6 percent and 32.9 percent at the end of February 2019. The maximum limit of this indicator is currently 40 percent, but in the draft circular replacing Circular 36, SBV has set a roadmap to reduce to 30 percent within the next two or three years. According to SSI’s analytical department, interest rates for long term deposits (from 12 months or more) are still difficult to reduce, even may increase slightly according to short-term programmes to carry out semi-annual targets of banks at Jun 30, 2019.
Previously, as we have reflected, long-term interest rates were pushed up by many banks over the past time to take advantage of capital to restructure the input capital. Except for the group of four largest banks and Vietnam Technological and Commercial Joint-Stock Bank (Techcombank) applying the interest rate around seven percent per year, the interest rate at other banks is mainly over 7.4 percent per year, even some banks push up very high at over 8.58.6 percent per year.
