Illustrative photo (Photo: VNA)

Hanoi (VNA) – Some commercial banks have entered a new interest rate hike race for long-term deposits with adjustments from 0.1-0.2 percent per year.

The Saigon Thuong Tin Commercial Joint Stock Bank (Sacombank) increased its deposit rates for 15-36 month terms by 0.1-0.2 percent from June 7.

The Vietnam Export Import Commercial Joint Stock Bank (Eximbank) announced a slight rise of 0.1-0.2 percent for different deposit terms. Currently, the bank is offering a rate of 8 percent per year for 24-month and 36-month deposits.

Bac A Bank has listed its highest rate of 7.75 percent per year and the deposit rate in National Citizen Bank is 7.3 percent.

According to Vuong Duy Lam, from the National Institute for Vietnam Finance under the Ministry of Finance, the commercials banks are prudent to shake up their capital in attempt to satisfy the State Bank of Vietnam (SBV)’s Circular 06/2016, which requires banks to lower the ratio of short-term funds used for medium and long-term loans from 60 percent in 2016 to 50 percent in 2017.

Abundant liquidity in the banking system together with stellar open market operations (OMO) rarely exerts pressure on interest rates, Lam added.

According to the SBV, deposit and lending rates of financial institutions were stable in the first five months of this year. Currently, lending interest rate averages at 6-9 percent per year for short-term loans and 9-11 percent for medium and long-term loans.

To have such achievements, the SBV has paid due attention to supporting financial organisations to stabilise interest rates and directing them to enhance business efficiency.

Earlier, in the context of high inflation, increasing credit demands pushed up the interest rates in financial institutions.

Lam said that when commercial banks complete capital balance, it will be easier for them to lower lending rates by the end of 2017.-VNA