Vietnam banks thirsty for US dollars, Vietnam Financial News
To accumulate US dollars as expected, many commercial banks are rushing to raise interest rates to the "ceiling" to mobilise US dollars. This fact has made the difference between the US dollar and dong interest rates become more ominous.
Racing to boost deposit rates
Asia Commercial JS Bank (ACB) has recently increased US dollar deposit rates in the period of 1-9 months by 0.15 percent - 0.2 percent a year, ranging from 3.65 percent to 4.45 percent a year.
Vietnam Export-Import Commercial JS Bank (Eximbank) has also hiked the deposit rates in US dollar for many terms, from one month to 12 months, and the highest levels now are posted at 4.45 percent a year.
Earlier, Southeast Asia Commercial JS Bank (SeABank) had adjusted up dollar interest rates to the very high as its one month rate already hit 4.2 percent, and six months at 5.1 percent. Some banks like An Binh JS Bank (ABBank), HCM City Housing Development Bank (HD Bank) also joined the race to raise dollar interest rates at highs.
Not only banks are raising dollar interest rates, they are also "racing" to offer special incentive services for customers. ACB will add 0.1 percent of bonus interest rate (36-month term) to customers who send in the form of floating US dollar deposits from September 22.
US dollar depositors at Eximbank will be entitled to receive ladder bonus interest rates, if they keep deposits as per schedule. And the reward of this ladder interest rate can be up to 2 percent a year.
From September, dollar loans earlier this year by businesses will overwhelm maturity, while the amount of mobilised dollars is still at a low level, which is said to be a major cause for banks to increase dollar deposit rates.
Nguyen Thanh Toai, deputy general director of ACB, admitted: "The reason why we have raised deposit rates to mobilise more US dollars is because our US dollar mobilisation is not favourable as just very few depositors have so far deposited dollars in the bank."
Pressure on exchange rates
Le Tham Duong, economic expert at HCM City Banking University analysed that the current average dong loan rate is 13.7 percent a year and deposit interest rates in the domestic currency is at the highest level of 11 percent per year. The highest US dollar deposit rate is now 4.45 percent a year, subtracted by "depreciation" of dollars, the US dollar and dong deposit rates is not in a big difference.
However, Dr Duong concerned that from now to the end of this year, with tense supply-demand on the Forex market, this will create pressure on exchange rates. "When business loans fall maturity and payment demand in the foreign currency will increase respectively, easily leading to the tension of dollars.
This phenomenon is easy to distort the balance of the US dollars on the official and unofficial markets. If this situation occurs, large demand, low supply, it will be difficult to keep exchange rates steady as the current level", Dr Duong said.
US dollar price on the free market on August 23 was adjusted downward, at 19,490 to 19,510 dong per US dollar, about 20 dong lower than the previous day. In the commercial banking system, the US dollar bid and ask price remained from 19,465 to 19,480 dong per US dollar.
Vietnam Business And Financial News Network. Source [intellasia.net]
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