Vietnam Bank News

Vietnam Bank Directory

Trade ETHUSD, Bitcoin and Cryptocurrencies

BUY & SELL ETHUSD | View ETHUSD News & Updates


Buy Sell ETHUSD, Bitcoin and Cryptocurrencies

Banking News & Financial Services News
Get the latest banking news headlines from Vietnammarkets.com. Find in-depth Vietnam coverage from banking, investing, financial, stock market, and more abou Vietnam banking system, bank for industry and trade, Vietnam banking sector.

Banks begin cutting interest rates again   2008-12-22 - TN, Agencies

Banks begin cutting interest rates again
 
   
Commercial banks Sunday began cutting interest rates in response to the central bank’s Friday announcement of a 1.5 percentage point reduction in the official interest rate.

 

Vietcombank, Vietnam’s third largest lender by assets, announced Sunday its new lending interest rate, effective from today, will fall by 1.48 percent points to 11 percent a year.

Sacombank, in which Australia’s ANZ Bank holds a 10 percent stake, will offer special lending interest rates of 10 percent to 10.5 percent a year from today to businesses that have been with the bank for a long time, bank general director Tran Xuan Huy said.

The Ho Chi Minh City -based lender, which is the only listed bank on the HCMC stock exchange, also cut term deposit interest rates, with the one-month term rate lowered by 0.7 of a percent point to 7.8 percent a year and three-month term by 1.28 percent points to 8.22 percent a year.

But deposit interest rates for term deposits of four months or more are unchanged.

Dong A Bank offers a deposit interest rate of 8.4 percent a year to clients for terms of between three months and two years.

Many commercial banks said they were cutting the US dollar deposit interest rates to 3 percent a year because demand for the greenback has been low.

On Friday, the State Bank of Vietnam lowered its benchmark interest rate to 8.5 percent from 10 percent, effective today, to help businesses overcome the tough economic climate.

The central bank will also make accessing credit for production, imports and exports of essential goods easier, while small and medium-sized enterprises, including those in the real estate business, “will be able to settle their due debts,” the bank said in a statement on its website.

Also according to the statement, the bank will cut the refinancing rate to 9.5 percent from 11 percent and the discount rate by 1.5 percent to 7.5 percent. Overnight interest rates for payments on the inter-bank market will be reduced to 9.5 percent from 11 percent.

Earlier this year, the bank raised its benchmark rate several times, from 8.25 percent to 14 percent, to fight double-digit inflation. In late October, it started cutting rates again to free up credit.

Commercial banks can set interest rates on dong loans at a maximum of 50 percent above the benchmark rate, so the maximum rate will now be 12.75 percent.

Rate cut will boost the economy

“The rate cut will help lower borrowing costs both for companies and individuals and help stimulate production and consumption,” said Do Ngoc Quynh, Hanoi-based head of currency and debt trading at Bank for Investment & Development of Vietnam (BIDV), the second-biggest lender by assets.

The cut is to “stimulate somewhat weak loan growth, domestic consumption and the economy, not so much for exports,” according to Adrian Cundy, head of research at VinaSecurities Joint Stock Co. in HCMC.

“The cut is in the upper end of our estimate of 100-200 basis-point reduction, which should give the stock market a good boost before the end of the year,” said Nguyen Minh Duc, head of the Institutional Investors Department at Thang Long Securities in Hanoi.

Cao Thi Hong, deputy general director of the Hanoi-based Vietnam International Securities Co., known as VISecurities said, “Though the rate cut was not a real surprise, it was a very good move by the central bank, especially with 2008 coming to an end.”

“Local banks will be forced to lower their lending rates to 12.8 percent, sharply down from 15 percent before the reduction,” Hong said. “Companies, particularly small and medium-sized ones, will find it easier to access credit.”

Hong also predicted the stock markets will react positively to the rate reduction and continue to gain this week.

“At 8.5 percent, Vietnam’s base rate is still high compared with other countries,” Hong said. “Therefore, we can expect lower interest rates in the near future.”

Dong A Bank CEO Tran Phuong Binh told Thanh Nien Daily that banks had already paid out the interest on high-interest term deposits. Earlier this year, banks were offering up to 21 percent interest on deposits but Binh said most of the term deposits were only for three months.


Other Banking News

Banks will be able to fulfill capital increase plan   2008-12-22

Banks decide to come to the party   2008-12-21

The paradoxes in the foreign currency market   2008-12-18

Most VN banks have internal audits   2008-12-15

Banks prepare for tough year ahead with lowered targets   2008-12-15

Lawyers: ACB illegally accessed investor’s account   2008-12-11

Bank interest rates going down, bonds becoming more attractive   2008-12-11

Banks moving ahead with capital increase plans   2008-12-11

Lawyers: ACB illegally accessed investor’s account   2008-12-11

How attractive will Vietinbank’s shares be?   2008-12-10

Over 87% of Ha Noi loan applications approved   2008-12-10

Central bank lowers rates for fourth time to boost growth   2008-12-04

Cash-rich banks resume lending to individuals   2008-12-04

Banking sector needs new technologies: central bank chief   2008-12-04