As a result, interest rates for loans have also increased, making it hard for companies to apply for loans. This will have a negative impact on the economy, as rate inflation in 2016 is forecast to stay low.
VietBank has raised its interest rate on long-term deposits to 7.5 percent. Its interest rate on short- and medium-term deposits have also increased. Such increases are a result of liquidity pressure and 2 other main factors.
Nguyen Tri Hieu, Finance and Banking Expert said: First, the interest rate for 1-year government bonds is above 5 percent, so banks must raise interest rates to about 7 percent to attract customers. Second, the State Bank slashed the dollar deposit interest rate to 0 percenet, which unbalanced the amount of US dollar and Vietnamese dong deposits.
Small and medium commercial banks are striving to attract customers by raising deposit interest rates. These rates are often 0.5 percent higher than those of state-owned banks. According to enterprises, business will suffer if the increase continues, because loan interest rates will also go up.
Do Phuoc Tong, Director, Duy Khanh Engineering Co.,Ltd, said: Mechanical / Engineering companies like us usually make long-term investments. The increase in long-term loan interest rates will limit our development.
There are reasons to worry about the increased interest rates. According to experts, there is disagreement between the current inflation rate and bank interest rates.
Nguyen Tri Hieu, Finance and Banking Expert said: If the 2015 inflation rate is 1 percent, the interest on deposits is around 3 percent. This will result in a 6 percent interest rate for loans. The fact is even worse than this example.
Some commercial banks have increased interest rates to enhance their liquidity at the end of the year. However, such increases may persist due to foreign currencypolicy/policies and the high government bonds rate.
