According to data from the Vietnam Interbank Market Research Association (VBA), average interbank interest rates—the rates at which banks lend to each other—on 1/12 saw increases of 0.8-1.62 percentage points across most maturities of one month or less, with the exception of the two-week term.
Specifically, the overnight rate, which accounts for the majority of transaction value among banks, climbed to 7%. This marks the highest level since 11/2022. Rates for other maturities also rose, with the one-week rate reaching 7.3% and the one-month rate increasing to 6.95%. The two-week rate remained unchanged at 6.1%.
In parallel, the average overnight US dollar (USD) interbank rate saw a slight increase to 3.92%, while other maturities, such as one and two weeks, held steady.
The average Vietnamese dong (VND) interbank interest rate has been on an upward trend, remaining elevated since early November. Concurrently, deposit interest rates in the retail market have also seen widespread increases.
Speaking to investors, Vu Minh Truong, Director of Capital and Financial Markets at Vietnam Prosperity Bank (VPBank), explained that prolonged rapid credit growth outpacing capital mobilization is creating pressure on liquidity and interest rates during the year-end season.
The State Bank of Vietnam reported that as of 30/10, total outstanding credit across the system had increased by approximately 15% compared to the end of last year. This figure is projected to reach 19-20% by the end of this year, representing the highest growth in many years.
In a recent report, VIS Rating, an investment credit rating agency, noted that liquidity is a significant concern, particularly for smaller banks. The industry-wide loan-to-deposit ratio (LDR) has reached 111%, its highest in five years, due to credit growth significantly outpacing deposit mobilization.
Liquidity pressure is most evident among smaller banks. VIS Rating suggests this pressure may persist as these banks increasingly rely on short-term market capital and face high credit demand. In this environment, deposits from the State Treasury play a crucial role in stabilizing the banking system's liquidity.
Quynh Trang
