Trang Chủ
Banks are also anticipating a decrease in US dollar lending if they increase their rates in response to changes in global monetary markets, which could spark fierce competition among banks for mobilising capital, said deputy general director of the Technological and Commercial Bank (Techcombank), Nguyen Thi Thien Huong.
She said that because the Fed raised its basic interest rate, domestic commercial banks would have to adjust their own rates to avoid difficulty in mobilising capital. "However, if we increase US dollar lending rates, demand for loans might decline," she said.
Director of the HCM City branch of the Bank for Foreign Trade of Viet Nam (Vietcombank), Nguyen Phuoc Thanh, commented that total lending at commercial banks amounts to just 60 per cent of total deposits, noting that when banks increase interest rates, domestic enterprises - especially import-export companies - hesitate to borrow.
Director of the HCM City branch of the State Bank of Viet Nam, Tran Ngoc Minh, warned that commercial banks should try to avoid unnecessary competition when mobilising capital using higher deposit interest rates.
Several joint stock commercial banks are poised to mobilise extra capital on US dollar lending by increasing their rates to reflect the new Fed rate. The Export and Import Joint Stock Commercial Bank (Eximbank), for example, raised its rates on US dollar deposits by between 0.2 and 0.6 percentage points.
However, some banks are continuing to monitor market fluctuations and other bank movements before announcing possible rate changes.
The HCM City State bank director said commercial banks should not be too concerned about short term trends in US dollar lending because it remains more enticing than the Vietnamese dong equivalent. Additionally, exchange rates of Vietnamese dong against US dollar have remained stable, he added.
According to a recent central bank report, US dollar interest rates remain about half those for Vietnamese dong. Vietnamese dong rates now range from between 9.7 and 13.8 per cent while those on US dollar lending stand at 6.4 to 7.1 per cent per annum.
Vietnam News, July 5
