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Banks cut deposit interest rates as credit growth lags

Update: May, 07/2014 - 08:56

The interest rates of long-term deposits also fell sharply. The six-month rate fell from 6.55 per cent yearly to 6.1 per cent; the nine-month rate fell from 6.6 per cent yearly to 6.3 per cent; and the 12-month rate fell from 7.7 per cent to 6.9 per cent.— Photo dantri

HA NOI (VNS) — Banks have continued to slash deposit interest rates amidst good liquidity and slow credit growth.

According to the latest mobilising rates at ACB, one- to two-month deposit rates have dropped to only 5.5 per cent yearly, down to 0.4 per cent compared to the previous rate. The three-month rate fell to 5.6 per cent yearly compared to 6 per cent earlier.

The interest rates of long-term deposits also fell sharply. The six-month rate fell from 6.55 per cent yearly to 6.1 per cent; the nine-month rate fell from 6.6 per cent yearly to 6.3 per cent; and the 12-month rate fell from 7.7 per cent to 6.9 per cent.

Sacombank also cut deposit interest rates slightly. The seven- to eight-month rates fell from 6.55 per cent yearly to 6.4 per cent; the nine-month rate fell from 6.7 per cent yearly to 6.5 per cent; and the 11-month rate fell from 6.8 per cent yearly to 6.7 per cent.

According to the banks, as the competition for lending among banks is now fierce, a further reduction in deposit interest rates is intended to cut costs for more attractive lending rates.

Data from the central bank revealed that deposits rose 3.09 per cent by April 20, while credit growth was only 0.62 per cent, much lower than 2.11 per cent of the same period last year.

In the interbank market, interest rates have also continued to slide for short-term deposits. The overnight rate yesterday stood at 1.65 per cent yearly, down to 0.15 percentage points against last week. One-week term rate also declined 0.15 percentage points to 1.9 per cent yearly. The declining rate for two-week terms was 0.3 percentage points.

Industry insiders forecast that interest rates will continually reduce soon as there are no optimistic signs for the abundant deposits at banks. — VNS

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