Commercial banks accounted for 56.8 per cent of the total city's deposits, up 18.4 per cent yoy, of which, the deposits in Vietnamese dong accounted for 84.3 per cent, while the remaining 15.7 per cent deposits were in foreign currencies.— Photo vietpress

HA NOI (Biz Hub) — HCM City's total capital mobilization reached VND1.16 trillion (US$55.18 million) this month, constituting a 1.9 per cent month-on-month or 15.1 per cent year-on-year (yoy) increase, noted the municipal Statistic Office.

This information was cited by newswire Tri Thuc Tre.

However, the credit growth of the city has been negative at 0.7 per cent.

The deposit records came as a surprise to observers since the city's banks had cut deposit interest rates by the end of February, which was supposed to discourage deposits.

Commercial banks accounted for 56.8 per cent of the total city's deposits, up 18.4 per cent yoy, of which, the deposits in Vietnamese dong accounted for 84.3 per cent, while the remaining 15.7 per cent deposits were in foreign currencies.

The State Bank of Viet Nam noted that the increase proved that savings and deposits were favourable investment channels, regardless of the considerably low interest rates.

According to several banks, although the property and stock markets were warming up, they were not likely suited for amateur investors.

In the meanwhile, the total outstanding loans in the city fell 0.7 per cent against the end of last year at VND946.3 billion (US$44.8 million). Loans in the dong accounted for 83.6 per cent, while those in foreign currencies were 16.4 per cent. Short-term loans dominated the basket schedule with 54 per cent.

As of March 13, Viet Nam's credit growth was negative, 1.05 per cent against the end of 2013, and the total money supply increased 2.96 per cent compared to the end of last year. Deposits grew by 1.92 per cent, of which dong deposits were up 2.23 per cent, but dollar deposits were down 0.09 per cent.

The central bank, which insists on targeting a credit growth of 12 to 14 per cent for the year 2014, stated that the negative credit growth was periodically understandable. It is believed that the credit growth will hike in the coming months, especially by the end of the year.

Last Monday, SBV, in a bid to spur economic growth and salvage dying businesses, cut policy interest rates cautiously by 0.5 percentage point. Accordingly, the current refinancing rate is 6.5 per cent, the discount rate is 4.5 per cent, and the overnight rate is 7.5 per cent.

The interest rate cap for commercial dong deposits of less than six-month term was slashed to 6 per cent from 7 per cent. No cap has been set for longer-term deposits. The cap for the USD deposit interest rate was also cut by approximately 0.25 percentage point across the board.

The cap for the privileged lending interest rate has been set at 8 per cent for short-term loans in Vietnamese dong, down by 1 per cent. — VNS