Interest rates in inter-bank and G-bond markets have declined significantly despite rising capital demands ahead of Tet (Lunar New Year), the country’s biggest holiday season.

Reports of the Maritime Bank’s economic research division showed that interest rates of loans in dong reduced 0.25-0.50 percentage points in all terms last week to 1.58 per cent for overnight loans, 1.73 per cent for one-week loans, 2.13 per cent for two-week loans and 3.70 per cent for one-month loans.

This is different from the previous years when the interest rates often rose significantly few weeks ahead of Tet, which saw rising demand for capital for shopping and other payments. For example, ahead of Tet last year, inter-bank rates surpassed 2 per cent for overnight and one-week loans.

The past week also saw a growing investment in G-bonds as investors bought all VND3.5 trillion (US$154.18 million), of which VND2 trillion were 10-year G-bonds and VND1.5 trillion were 15-year G-bonds.

Yields of the bonds dropped sharply by 0.52-0.70 percentage points to 4.38 per cent for 10-year G-bonds and 4.5 per cent for 15-year G-bonds. — VNS