HCM CITY — The maximum interest rate offered on dong deposits has fallen to 14 per cent from a record high of 17.5 per cent recently, but interest on dollar deposits remains high at above 5 per cent.
Some banks pay even higher — Phuong Dong (Oriental) Commercial Bank offers retail depositors 5.1 per cent for seven to 13 months while An Binh Bank pays 5.6 per cent for 60 months.
Even large banks face the risk of losing customers if they cut the rate: Eximbank Vietnam, for instance, pays 5.2 per cent for three-month terms.
With businesses usually paying off debts to foreign and local partners during the year end, there is a high demand for foreign currency loans now. Many businesses also require dollars for importing items for the long holiday season between Christmas and Tet (the Lunar New Year).
But there has been a spurt in lending through the year. The State Bank of Viet Nam said commercial banks operating in HCM City lent almost VND185 trillion (US$949 million) in US dollars, a year-on-year increase of 35.4 per cent.
The central bank also said foreign currency lending in the country was up almost 37.8 per cent this year compared to a 25.34- per- cent rise in dong loans.
Businesses accepted dollar loans despite the volatility in foreign exchange to enjoy the much lower interest rates compared to the dong.
Le Xuan Nghia, deputy chairman of the National Committee for Financial Supervision, said the Government had assigned top priority to cooling inflation (at 11.75 per cent this year). Once inflation was lowered, the interest rate problem would cease, he assured.Source: vnagency.com.vn
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