According to recently released data from the State Bank of Vietnam, the average lending interest rate in june increased by 0.4 percentage points compared to the previous month. This marks the period of the most significant interest rate adjustments by banks over the past year.
Currently, nearly 10 banks are offering loans with effective interest rates exceeding 10.5% per year. These rates vary depending on the customer, risk level, financial capacity, and collateral. For instance, TPBank applies an average rate of 10.95% for individuals, OCB 10.78%, and BVBank 10.45%.
Some banks have also published average lending rates based on loan terms. SeABank, for example, disbursed short-term loans to individuals at a rate of 10.18%, while medium to long-term loans were at 10.44%. At HDBank, these rates were 8.5% and 10.4%, respectively.
The State Bank of Vietnam reported that short-term lending rates for priority sectors remain at 3.9% per year. These sectors include export, agriculture, supporting industries, small and medium-sized enterprises, and high-tech applications. This rate is nearing the regulatory short-term interest rate cap of 4%.
In line with the fluctuating lending rates, banks also raised deposit interest rates across most terms. Savings accounts for 6-12 months offered an average interest of 6.1-7.6%, while those over 24 months ranged from 7.1-7.8%. Both figures represent a 0.2 percentage point increase from the previous month, reaching their highest levels in a year.
Banks are maintaining an average spread of about 3-4% between deposit and lending rates, a slight increase since the beginning of the year.
Most experts and analysts anticipate that interest rates will remain elevated in the coming months. In a newly published investment outlook report, analysts from Rong Viet Securities Company (VDSC) attributed this to a liquidity shortage within the system. While including State Treasury deposits in the loan-to-deposit ratio (LDR) and loosening the ratio of short-term capital for medium to long-term loans have partially eased pressure, they have not fully resolved the underlying issue.
Speaking to VnExpress earlier this month, Tran Van Tanh, Head of Institutional Client Analysis at Yuanta Vietnam Securities Company, stated that the State Bank of Vietnam aims to cool down lending interest rates to support the economy. However, high mobilization costs limit commercial banks' room to reduce rates.
One significant obstacle to reducing interest rates is the priority placed on exchange rate stability. According to VDSC, as monetary policies of major central banks (US, Japan, EU) remain cautious and somewhat restrictive, the State Bank of Vietnam may need to maintain an attractive USD-VND interest rate differential to retain foreign currency flows within the system.
Despite these challenges, the VDSC analysis team believes a scenario of rate reduction is still possible late in the year. However, the extent and pace of such reductions may be moderate, as the system requires time for rebalancing and gradual adjustment of capital costs, which increased significantly in the first half of the year.
Experts from United Overseas Bank (UOB), a Singapore-based bank, suggest that "the most reasonable scenario is for the State Bank of Vietnam to keep interest rates unchanged in the second half of the year." This group argues that increasing policy rates would be ineffective against supply-side inflation, such as rising energy prices or imported input costs. Conversely, cutting interest rates would also lack justification when inflation remains near the operational target.
Core inflation increased by 4.12% in the first half of the year, while the State Bank of Vietnam's target is to control average annual inflation to around 4.5%.
Phuong Dong
