Overnight rate as well as one-week and two-week interbank interest rates shot up in December to a general 3-3.5 per cent per annum, in comparison with the below one per cent in the previous month.

In the past two weeks, interbank interest rates have shown the tendency to increase with great amplitudes for all three maturity dates, the Research and Investment Advisory Department at Bao Viet Securities Joint Stock Company (BVSC) said.

The average overnight rates increased by 1.45 per cent to 3.04 per cent annually, the one-week interest rates increased by 1.49 per cent to 3.18 per cent, whereas the two-week rates increased 1.34 per cent to 3.42 per cent annually.

The State Bank of Vietnam announced credit growth at the end of November 2016 to be 15.8 per cent, while capital formation growth reached 15.2 per cent.

According to BVSC, the rapid increase in credit growth for the last month was not an irregular movement, as the demand for loans across the economy generally spikes at the end of the year. Surplus liquidity due to rapid credit growth, together with a certain amount of VND leaking into the foreign currency sector following several recent exchange rate changes, would serve as one of the direct causes pushing interbank interest rates to a new level.

BVSC expected interbank rates to maintain the current high in weeks to come, fluctuating at 3-4 per cent per annum. —VNS