Vietnamese banks continue to cut deposit rates

In recent days, many commercial banks in Vietnam have continued to cut deposit interest rates for the second time since early April.
Transactions at an ABBANK office.
This is the third time ABBANK has changed its rates since 2023 began and the second time in April. (Photo: ABBANK)

Deposit and lending rates are forecast to continue going down in the coming time.

Starting from April 12, ABBANK announced a new interest rate schedule with 8.5% for 6-month deposits and 8.8% for 12-month deposits. This is the third time the lender has changed its rates since 2023 began and the second time in April.

MSB has also announced a new deposit interest rate schedule with a cut of 0.2 - 0.4 percentage point for terms of six months or more.

For online deposits, the interest rate stays at 5.5% for terms from one to under six months.

The rate for the six-month deposits dropped from 8.3% to 8% and the rate for 12-month deposits decreased from 8.4% to 8.1%.

The rate for 13-month deposits went down from 8.5% to 8.3% and rates for 18-month, 24-month and 36-month fell from 8.7% to 8.3%.

Techcombank also lowered its interest rates for deposits of six months or longer from 8% to 7.8%.

According to the survey results on the business trends of credit institutions in the second quarter of 2023 by the State Bank of Vietnam’s Department of Forecast and Statistics, credit institutions expect the average deposit and lending interest rates to go down by a slight 0.08-0.1 percentage point in this quarter and by 0.19 - 0.34 percentage point in 2023.

This result was different from the previous survey when most credit institutions predicted a slight rise in interest rates in the first quarter and the whole of 2023.

In its newly released report, securities company VnDirect also predicts that deposit interest rates will keep dropping until the end of 2023.

This is because the US Federal Reserve may stop raising interest rates in mid-2023, the borrowing demand declined due to slower economic growth and a sluggish real estate market, and the government increased public investment, which injected more money into the economy.

“We expect the 12-month average deposit rate to drop by another 50 basis points to 7.0% in the second half of 2023”, commented VnDirect.

Bao Viet Securities also believes that in the near future, the State Bank of Vietnam may lower interest rates more to boost growth.

This is because there is no pressure on exchange rates and inflation is under control again. Deposit rates are expected to go down by 1 percentage point by the end of 2023.

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