Từ khóa: #interest rate

Macro data for growth acceleration in the first quarter of 2023 has sprung a surprise for the stock market as indications are far lower than expected.

On the afternoon of March 14, many investors were left startled when the State Bank of Vietnam decided to reduce the operating interest rate and the short-term lending interest rate of credit institutions.

One week after the State Bank of Vietnam (SBV) reduced the benchmark interest rates, the deposit interest rates in the market continued the downward trend.

When the US Federal Reserve (FED) recently raised the interest rate, the stock market reacted positively, unlike in 2022 the continuous raising of the interest rate by the FED had caused panic across markets.

High lending interest rates will challenge the target of controlling inflation as well as production and business activities.

Most businesses that are in need of capital in the current economic scenario expect a regulatory adjustment, as most of them are facing extreme difficulties in running their entire operations.

The move made by some commercial banks to reduce the lending interest rate, and the decision of the State Bank of Vietnam to increase credit by 1.5 percent to 2 percent has had a positive impact on manufacturing and export enterprises.

Economic instability across the entire globe is bound to affect Vietnam as well. Although economic data for Vietnam shows that difficulties have been overcome, but the fact remains that scores of businesses are still struggling. 

There were no new IPO deals in Vietnam in the third quarter of 2022, according to recent data from Deloitte, as the figure was only counted in the first half of the year.

The stock market in Vietnam fell into group of world's strongest falling markets when it lost 11.6 percent of its value in September. 

Vietnam's monetary policy is under huge pressure to stabilize the exchange rate and also maintain the interest rate. 

Although the US Federal Reserve (FED) raised the interest rate in the hope of reducing inflationary pressure, it has come as a shock to see a rise in the core US inflation data, despite falling oil prices. At present Vietnam's macro data continues to be positive but the domestic stock market is reeling from external variables.

There is still some apprehension of a potential external risk when the US Federal Reserve (FED) increases the basic interest rate at a meeting to be held by 20 September. 

Recently, the State Bank of Vietnam (SBV) has sent a strong message, asking commercial banks to strictly control credit into the real estate sector in the context that the market shows signs of hot growth. This move leads to concerns that the real estate market will face difficulties in the near future.

Although the State Bank of Vietnam (SBV) has had the policy to reduce interest rates and extend the repayment period to support enterprises in the restoration of production and business activities, many commercial banks said that there should be more mechanisms for implementation.

The State Bank of Vietnam Ho Chi Minh City Branch, on September 29, said that by the end of September 2021, the outstanding balance in the city was estimated at nearly VND2.7 quadrillion, up 6.41 percent compared to the end of 2020.

Recently, the conditions for corporate bond issuance to the public have been tightened by the State. This is a move to reduce risks for investors, especially for individual investors, so the number of issued corporate bonds has also fallen sharply. However, in the context that deposit interest rates remain at a low level, many enterprises have issued corporate bonds with high-interest rates to attract capital.

Some VND7.646 trillion (US$329.8 million) was mobilised for the State Treasury through a Government bond auction at the Hanoi Stock Exchange (HNX) on October 7.

The negative impacts of the Covid-19 pandemic have been heavily affecting enterprises, especially small and medium-sized enterprises (SMEs). Most SMEs are short of money to put into production and business. The credit growth of the banking industry in the first six months of this year was quite low, so banks are actively pushing capital into this segment.

By June 16, the credit growth of the banking industry merely reached 2.13 percent compared to the beginning of this year. Thus, in the first nearly six months of this year, credit growth was only half of that in the same period last year due to the serious impacts of the Covid-19 pandemic.