Credit institutions have attracted a net 900 trillion VND in deposits from residents since the beginning of the year, reaching the highest level according to data from the State Bank of Vietnam. In July alone, residential deposits increased by over 150 trillion VND, approximately 1.37% compared to the previous month.
Conversely, economic organizations reduced their deposits at banks. This group deposited 6.24 quadrillion VND, a 2% decrease from the previous month, ending a 5-month streak of increases.
However, across the entire system, the total deposit amount still edged up by 0.2%, reaching approximately 20.5 quadrillion VND. This figure marks four consecutive months of increase, driven by current deposit interest rates being about 1.5 percentage points higher than at the start of the year. Many banks are currently offering interest rates of 8-9,5% for 6-12 month terms, exceeding their publicly listed rates.
The elevated interest rate environment is primarily a result of the imbalance between credit growth and deposit mobilization. At certain times, the disparity approached 2 quadrillion VND, compelling banks to actively compete for savings deposits. This effort is complemented by mobilizing additional funds through avenues such as: issuing valuable papers, interbank borrowing, and deposits from the State Treasury.
In a report published on 17/9, the Economic and Financial Market Analysis Department of Techcombank noted that liquidity pressure has eased compared to earlier periods, though it has not been fully eliminated. This is evident as recent overnight and one-week interbank interest rates have fallen to low levels, while longer terms of one to three months persist around 6,9-7,5%. Banks are exercising caution regarding the liquidity outlook for the coming months, particularly with rising inflation and high capital demand for infrastructure projects.
"Deposit interest rates will largely remain stable from now until the end of the year," Techcombank's analysis team predicted.
Experts from SSI Securities Company and Yuanta Vietnam Securities Company share this perspective, suggesting that interest rates are unlikely to decrease in the short term. This is especially true as credit demand tends to accelerate towards the end of the year. Central banks will likely need to maintain current interest rate levels or continue to increase them if inflation proves persistent. This trend places additional pressure on interest rates, which are already affected by domestic liquidity, thereby potentially keeping rates high.
In a more favorable scenario, if the State Bank of Vietnam resumes buying foreign currency to bolster reserves when the exchange rate is low, the injection of Vietnamese Dong into the system could create room for interest rates to decline.
Phuong Dong
