Some commercial banks have continued to reduce the interest rate for short-term deposits by 0.1 to 0.3 percentage points in the past week thanks to good liquidity.

Sacombank announced that it has applied new rates from June 15, lowering its annual interest rate for two-month deposits by 0.1 percentage point to 5.2 per cent per year.

Techcombank also lowered deposit interest rates for all terms by 0.1 to 0.3 percentage points on May 12. The bank has cut rates for one- and two-month deposits by 0.2 percentage points to 4.6 per cent per year, while the rate for three to five month deposits now stands at 4.75 per cent.

It also listed the rate for 6 to 12 month deposits at 5.6 per cent, down 0.3 percentage points.

Techcombank’s highest rate of 6.4 per cent per year is currently applied to deposits with a term of more than 12 months.

A number of banks, such as Vietcombank, BIDV, Vietinbank, and Eximbank, as well as LienVietPostBank, also lowered their interest rates for short-term deposits last month by some 0.2 percentage points.

Experts attributed the decline to the good liquidity of banks. Large withdrawals from the securities and real estate markets, caused by the slowdown of the two markets, have resulted in an increase in bank deposits, experts said.

However, lending by banks has been restricted in an effort to control credit growth. The central bank has set a cap of 12 to 14 per cent in credit growth for many banks this year, even as a number of banks reported a credit growth of between 8 and 9 per cent in just the first five months of the year. As a result of these restrictions, banks have decided to gradually reduce deposit rates to save input costs.

The deputy governor of the State Bank of Viet Nam, Nguyen Thi Hong, announced that credit growth in the banking system at the end of May increased by 6.16 per cent compared to the end of 2017.

The credit structure has now been shifted to the manufacturing sector, especially in priority fields, while loans to sectors that pose high potential risks, such as securities and real estate, have been tightened to ensure the safety of banking system, Hong said.— VNS