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.
Commercial banks have agreed to lower deposit interest rates by about 0.5 percent starting from March 6, while State-owned banks will only reduce their rates by 0.2 percent because they are already at the lowest level in the market.
Many experts said that interest rates in Vietnam are currently too high, so it is necessary to reduce them to support people and enterprises to recover and develop production and business activities.
After SGGP newspaper published a series of articles titled "High interest rates weaken the economy", economists and the business community contributed their opinions on this issue.
Vietnam's lending interest rates are higher than many countries in the world, while last year, Vietnam was one of the countries with the lowest inflation level. This paradox needs to be explained to find solutions to ease the burden on businesses.
The State Bank of Vietnam’s (SBV) Ho Chi Minh City (HCMC) branch will continue to prioritize credit for production and business, especially in priority sectors, to boost economic recovery.
Many commercial banks said that in the past time, they have managed to provide capital with reduced lending interest rates for some businesses during the peak season in business at the end of the year.
While a few banks announced cutting lending interest rates to support enterprises to access good capital for production and business activities at the end of the year, in the savings market, deposit interest rates remain hot every day.
After Vietcombank, HDBank has recently announced to lower lending interest rates for enterprises doing business in many industries with a total interest rate reduction of up to VND120 billion.
The recent sharp increase in deposit interest rates has pulled lending interest rates up by 3-4 percent per annum over the same period last year. In the face of highly increasing pressure on the USD/VND exchange rate, deposit interest rates have not cooled down yet, so the pressure on lending interest rates in the peak months of the year is still huge.
Amid the context that central banks of many countries raised interest rates sharply, from September 23, the State Bank of Vietnam (SBV) decided to increase operating interest rates, which experts assessed as a timely action.
Facing the pressure of increasing prices of goods, many enterprises worry that lending interest rates will stay at a relatively high level in the coming time.
Four State-owned commercial banks continue to commit to sparing a support package of VND4 trillion to cut interest rates and all banking service fees for customers in localities implementing social distancing under Directive No.16/CT-TTg of the Prime Minister.
Many economic experts said that with the current credit scale of over VND10 quadrillion if banks reduce the lending interest rate by 0.5 percent per annum, enterprises will have tens of trillions Vietnamese dong more to overcome difficulties. However, these experts also said that they barely expected a deep and wide wave of interest rate cuts because banks are enterprises themselves, so they must consider carefully when they give loans.
The State Bank of Vietnam Ho Chi Minh City Branch (SBV-HCMC Branch) has recently asked local credit institutions to continue implementing solutions to support and remove difficulties for borrowers affected by the Covid-19 pandemic according to the regulations on debt repayment rescheduling, exemption, and reduction of interest rates and fees, and new loans following Circular No.01/2020 and Circular No.03/2021 of the SBV.
The State Bank of Vietnam (SBV) said that to support people and businesses affected by the Covid-19 pandemic, credit institutions have provided new loans with lower interest rates than before the pandemic, with an accumulated loan outstanding balance from January 23, 2020, to now exceeded VND3.5 quadrillion.
The fact that savings interest rates are at the lowest level in history has made the cash flow shift to other investment channels, including real estate. This is also one of the reasons that cause land fever in many provinces across the country.