The State Bank of Vietnam (SBV) yesterday just issued a decision on the adjustment of savings' interest rates from October 25, 2022. This is the second time the State Bank has raised the operating interest rate to stabilize the currency exchange rate in the face of fluctuations in the international market.
Thanks to increases in savings interest rates, people have deposited more into their savings accounts, said the State Bank of Vietnam branch in Ho Chi Minh City.
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.
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.
After hitting a record low in 2022, Vietnam’s money supply (M2) will rebound in 2023 and become an important driver for the recovery of the stock market, KB Securities Vietnam (KBSV) forecast.
In the early days of May 2022, many banks have raised their savings interest rates by about 0.1 percent-0.5 percent per year compared to April, especially online savings rates have increased by up to 0.7 percent per annum.
In the context of tight credit, capital demand often increases at the end of the year, so the race in the deposit interest rates of commercial banks has been increasingly hot. The highest interest rates on deposit products in the market have reached 8.4 percent per annum. Some banks even have offered the highest 13-month deposit interest rate of up to 8.8 percent per annum, but it is for an extremely large sum of deposits.
In the context of rising inflation, many banks have increased deposit interest rates to attract idle money. This step has caused many businesses to worry that lending rates will increase. However, many people said that the 2 percent interest rate of the State's support package can help reduce the pressure to increase lending interest rates.
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.
Deposit interest rates have just been simultaneously raised by commercial banks and are expected to increase further to prepare cash flows in the context that the whole country has returned to a new normal state, and production and business activities have been restored.
It has become increasingly apparent that individual investors are not fully versed with the knowledge to trade on the stock market, and therefore are prone to facing shocks and risks.
The wave of interest rate cuts has been activated, and it is forecasted that the interest rate level will remain low from now until the end of the year to support businesses and the economy amid the context that the Covid-19 pandemic prolongs as currently.
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.
According to statistics from securities companies, in the first months of this year, the corporate bond market shows signs of cooling down compared to before because changes in regulations on corporate bond issuance have been tightened.
Profit reports in the first quarter of this year of commercial banks have revealed the huge profits of lenders. This is also one of the reasons why banking stocks strengthened strongly recently, contributing to supporting the VN-Index to set a new high in history.
With an abundant source of money, many banks have launched credit stimulus packages and reduced lending interest rates for corporate and institutional customers.
Reports by securities companies showed that more than VND60 trillion worth of corporate bonds has been issued since the beginning of this year, of which, real estate and construction field was the runner-up in the amount of issued corporate bonds with VND16.23 trillion, accounting for 27 percent.
