Illustrative image (Photo: VNA) They attributed it to sluggish credit growth and challenges that lendingcontinues to face, and loose monetary policy, leading to a surplus ofliquidity.
Banks have been steadily reducing deposit interest rates since April and theyhave now gone below 5.5% per year, even lower than during the COVID-19 pandemicperiod.
A few days ago, State giant Vietcombank continued to reduce itsrates, which have gone to the lowest in years.
On October 7, its highest rate was 5.3%, lower than the pandemic period, when ithad been 5.8%.
Three other State-owned banks, Agribank, BIDV and VietinBank, havecapped the rate at 5.5%.
Nguyen Tri Hieu, a banking expert, said deposit interest rates would continueto decrease this year though not to the same extent as before.
Dr Can Van Luc, chief economist of BIDV, said policy interest rates shouldremain stable since further lowering is unnecessary.
Besides, reducing them further could put pressure on the exchange rate, hepointed out.
Nguyen Tri Hieu, a banking expert, said deposit interest rates would continueto decrease this year though not to the same extent as before.
Dr Can Van Luc, chief economist of BIDV, said policy interest rates shouldremain stable since further lowering is unnecessary.
Besides, reducing them further could put pressure on the exchange rate, hepointed out.
In a recent report the World Bank claimed there was not much roomleft for Vietnam to loosen monetary policy.
Credit demand continues to be low though interest rates have plummeted, andfurther cuts are unlikely to promote credit growth, it claimed further.
Dr Tran Hung Son, a lecturer at HCM City National University’s University ofEconomics and Law, warned that reducing interest rates too quickly would widenthe difference between domestic and international interest rates, especiallydollar-denominated ones.
As the gap widens, pressure on the foreign exchange rate would be inevitable,he added.
Peter Verhoeven, chairman of Prometheus Asia SDN BHD, said while Vietnam isloosening its monetary policy unlike the US or the EU, the move is appropriatesince it has controlled inflation well.
The steady deposit rate cuts are expected to further bring down lending rates sincethe SBV has been exhorting lenders for long to reduce them to supportbusinesses.
Industry experts forecast a bleak outlook for the banking industry this yeardue to stagnant credit growth and falling profits, with smaller players inparticular expected to face a sharp drop in profit growth./.
Credit demand continues to be low though interest rates have plummeted, andfurther cuts are unlikely to promote credit growth, it claimed further.
Dr Tran Hung Son, a lecturer at HCM City National University’s University ofEconomics and Law, warned that reducing interest rates too quickly would widenthe difference between domestic and international interest rates, especiallydollar-denominated ones.
As the gap widens, pressure on the foreign exchange rate would be inevitable,he added.
Peter Verhoeven, chairman of Prometheus Asia SDN BHD, said while Vietnam isloosening its monetary policy unlike the US or the EU, the move is appropriatesince it has controlled inflation well.
The steady deposit rate cuts are expected to further bring down lending rates sincethe SBV has been exhorting lenders for long to reduce them to supportbusinesses.
Industry experts forecast a bleak outlook for the banking industry this yeardue to stagnant credit growth and falling profits, with smaller players inparticular expected to face a sharp drop in profit growth./.
VNA
